2023 saw a record low for house sales in France and 2024 is set to be just as bad, but is there hope on the horizon.
It was
reported by Altarés that just under 900 l'agent immobiliers (estate agents)
hung up the ‘closed’ sign for good, either going into liquidation or
receivership in 2023 fueled by falling property sales.
The
closures effected both larger national chains as well a local independent
agents and was a sharp increase of 116% on 2022 figures and is the highest
since the housing crisis in 2009.
The cost of
living coupled with increasing interest rates have created a difficult market with
property sales decreasing rapidly. A recent report from Fédération Nationale de
l’Immobilier – Fraces leading estate agent union, stated that 875,000 non
new-build houses were sold in 2023, that’s a 22% drop from over 1,115,000 in
2022, this equates to the sharpest year-on-year drop for a decade.
With
mortgage rates still above 4% for an average 20 year term the industry is
seeing a 19% drop in transactions. It is hoped the proposed rule change for
mortgages to be extended from 20 to 25 years may help buyers return to the
market
Many agents
were still struggling to pick themselves back up after covid, with a number of
smaller agencies financially crippled by the repayments of State loaned covid payments
Property values have also seen a dip with Paris experiencing up to 3.7%
drop in average house price, whereas regions outside of the Countrys’ capital
are seeing even bigger declines in value, Lyon and Toulon saw 85% drop while La
Rochelle, Toulouse, Le mans and Liile saw values drop between 3%-6%. The North
and West of France saw the biggest drop between 15% and 30%
This trend
is not helped by the lack of first time buyers to the market, many are opting
to remain in rented accommodation because of the cost of mortgages coupled with
the reluctance of sellers to accept lower prices.
The new
build market has not avoided this problem either, with the rising cost of raw
materials, inflation and the lack of buyers, construction of new build blocks (
flats & apartments) has dropped by 13% in the last 3 months with houses
seeing a 7% drop, the reservations for new build homes has dropped 40% in the
last 12 months, despite the expected boost to the sector by the PTZ an interest
free loan designed to spark an increase in new build purchases, notaires are
saying the complexity of the application is putting many first time buyers off
2024 is
predicted to be worse with house prices plummeting further, but there may well
be light at the end of the tunnel in the form of British buyers.
New rule
for staying longer in France
In December
2023 French MPs voted to allow Brits who own second homes in France to stay in
the country for up to 6 months without a visa, this is in contrast to the previously
restrictive Schengen rules which only allowed a stay of up to 90 days in any
180 days period – interestingly these previous restrictions were not mirrored
for any French who wished to stay in the UK who have always been allowed to
stay up to 6 months without a visa.
It is
estimated over 86,000 Brits own a second home in France and this is expected to
increase with the relaxation of the rules.
Property
portal Kyero recorded a 582% increase in Brits house hunting in France in the 3
weeks following the change in the rules.
With Spain also
in talks to relax their residency rules it could open the floodgates for international
property transactions.
Lets hope this
is the lifeline French agents have been waiting for
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