French Property Predictions: What to Expect from the Market in 2022

As 2021 draws to a close, we asked our network of FrenchEntrée partners and experts to look ahead to the new year and let us know what they foresee for 2022. (That’s not all – we also asked them for their top tips for buying in 2022). From property sales and mortgages, to currency exchange and legal advice – here’s what our experts predict for the French property market in 2022.

We see the market for British buying property in France to continue over the next year, though the current Covid situation means travel restrictions may continue for some time and adversely affect the usual purchasing timeframe.

People who already own property in France continue to sell and move to other areas and properties, and we’ve a substantial advance order book for 2022 for clients requiring planning and architectural services throughout the country. We’re very optimistic that will continue over the coming months and years.

From 1st January 2022, new thermal regulations come into force for all new build dwellings, essentially meaning new homes will have to be passive in terms of energy consumption.  The final details are still being worked on, and we’ll provide additional information at the earliest opportunity.  However, renovations, extensions and conversions will not immediately be affected by the new regulations.

“House prices in France are going up – especially for the lower-priced properties. The values of the more expensive houses are pretty stable, but there is very strong demand – which is increasing – for properties priced under €200,000. On the positive side, land prices are relatively stable, especially on the outskirts of towns. However, prices are increasing in the centre of towns.

If you are looking for a property close to the coast – be prepared to pay more! However, let’s not forget that house prices in France compared to the UK and other markets are extremely affordable. It’s an exciting time for sure.”

Sterling buyers

There are 2 items Euro buyers should be focused on as we move in to the new year: COVID and interest rates. The Bank of England have already raised interest rates within the UK and are expected to do so again in the new year to combat the longer term inflationary concerns. With the European central bank unlikely to move as quickly, this increase will provide a widening yield advantage for the pound over the Euro as we move through 2022. Although this has already been somewhat factored in, it provides the possibility of a continued recovery in the pounds value against the Euro.

However, COVID remains the biggest uncertainty with the potential to alter the course of financial markets at short notice. If the latest variant leads to further restrictions being introduced here and abroad, we may well see a risk averse market, which we know from 2020 tends to favour the Euro over the pound.

Dollar Buyers and Sellers

The USD looks set to continue its winning streak in the short term with fears rising regarding the latest COVID variant leading investors to seek the safety of the USD. As with the UK, the US are already having to deal with high inflation meaning tighter monetary policy moving forward, which will be achieved through tapering of their bond buying program as well as eventual interest rate rises. This will add to the appeal of the US Dollar. As and when the COVID situation begins to improve, we may start to see things change as investors start to move away from the shelter of the dollar and back in to riskier assets, so Dollar sellers need to keep a watchful eye on global economic sentiment.