France is climbing back up the popularity ladder when it comes to foreign real estate buyers according to Google. Their search data shows a strong increase in demand among foreigners looking for property in France: in Q1 2015 search queries were up 18.8 % on the same period last year. Although Russian buyers have almost disappeared, the British are renewing their love affair with the RÃ©publique and gradually returning to the market after a prolonged absence.
House prices are easing in many locations, fixed interest rates have hit record lows and thanks favourable currency exchange rates, if ever there were a time to by property in France says Tranio.com an international real estate broker.
The market in âIle-de-Franceâ (Paris) has seen prices fall by 1% during the first quarter of 2015 according to figures published by National Federation of Real Estate (FÃ©dÃ©ration Nationale de lâImmobilier, FNAIM) and it doesnât stop there. Prices are going down across the country and Knight Frank is reporting 2.3% drop last year. Forecasts confirm this trend for 2015 with experts suggesting 1.0â1.3% decline this year. While this situation is beneficial for buyers in the midrange market, no strong impact is forecast for the high-end property segment.
According to Meilleursagents.com, the average square metre in Paris is selling for â¬7,810, in Nice at â¬3,754 and in Biarritz for â¬4,799.
Some experts believe that French property still remains overvalued and new apartments are showing stable prices despite the general slowdown. According to French Federation of Property Developers (FÃ©dÃ©ration des Promoteurs Immobiliers, FPI), the average price for a new home has even slightly increased: â¬3,945/sq.m in comparison to â¬3,932 in 2014.
Interest rates hit record low
French mortgage rates are at an all-time low. Buyers can secure a 20-year mortgage at a fixed rate of 2.3%, according to Empruntis. Interest rates on 7-year loans vary from 1.11% to 2.9% and even the maximum rate for 40-year loans is only 4.1%, which is nevertheless relatively low. Non-residents can get a mortgage in France capped at 60â70% of the property value with maturity terms of 5â25 years.
Exchange rates bliss for dollar and sterling spenders
The euro declined by 68% against the dollar and 57% against the British pound since May 2014 according to Oanda.com. This means that buyers from Britain and the States have significantly improved purchasing power in Europe. With the pound sterling worth â¬1.39 (up from â¬1.23 in May 2014), the price of â¬1M house in France has fallen by Â£93,800: from Â£811,600 to Â£717,800, meaning big savings for smart investors.