Property Update: How will COVID-19 affect the French Property Market?

We are fortunate to work with a network of highly experienced, licensed estate agents across the most popular areas of France. This week, as some countries ease out of lockdown and others face a potential second wave, we examine what the impact of COVID-19 has been on the French property market, and what the next 6-12 months might look like.

Thanks to all of the partners below for taking the time to share their thoughts with us.

Andrew Hosker, Blue Sky Immobilier:

“Everyone has a different theory on how things will pan out; I can only share our experience since the “deconfinement”. Almost 4 months after lockdown and we’re fully up and running and to be honest things look good. We believe that during the confinement period people had the chance to stop and assess their plans and the experience has ultimately pushed them into making concrete decisions.

For the past few months we’ve had an incredible amount of valuation requests, which means people have made their minds up to sell. This is great if you’re looking to buy a property because you’ll have a larger choice to choose from!

Our challenge now is to find buyers and this is where, we believe, the virus has had its biggest impact. The government “chômage partiel” scheme has bailed a lot of people out in France but it has also made their pay slips look a lot less attractive to banks. So the critical thing now is for future buyers to get back to work. Once they have 3 months of consistent pay slips they will be able to borrow the money they need to purchase.

For international buyers, the problem is obviously travel restrictions and quarantine periods. I doubt we’ll see too many Americans being active on the market, but this may be compensated with more Europeans.

What is for sure is that the Cote d’Azur remains one of the most beautiful places to live in the world. The team at Blue Sky Immobilier are here waiting to help you through the entire purchasing process.”

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Susie Hollands, Vingt Paris:

“It is possible the city properties which have ‘issues’ will be less sought-after. Paris has a lot of properties which are less than perfect, and these will be hard to sell at pre-COVID prices.

Has there been an impact on property prices? Depends on the situation of the seller generally; some have accepted reduced prices as their own lives have changes and have decided to reinvest, move or cash out.”

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Sophie Folley, Sophie Folley Immobilier

“I think there has been a slowdown in International buyers, but we haven’t really felt it because the uptake in French buyers has more than compensated for it. We are inundated with French city dwellers looking to buy holiday homes and main residences in the countryside.

As a result we are starting to see a shortage in good quality stock, which in turn is starting to push property prices up. I remain sceptical about the future. This period of activity will not last forever, and I am sure we will soon start to see the effects of the virus on the economy in future months. We are already seeing banks turning prospective buyers away, particularly first-time buyers who do not have sufficient deposits to put down. “

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Freddy Rueda, Real Estate Languedoc:

“The demand remains high, there is only a slowdown in terms of viewings as with the various quarantines imposed lots of buyers are postponing their trip to Spring 2021.

This year there was an incredible number of buyers of properties in the Languedoc, particularly village houses close to amenities. Many of our buyers have been looking to relocate permanently, not just buy a holiday home.

Property prices have not been hit yet, as over the last 3 months there has been an increase in sales of around 30% compared to the same period last year. We are still surprised by the number of enquiries we are receiving. It looks like many people want to invest in property rather than leaving their money in the stock markets.

Properties are not selling for less than expected, as this moment the market is good and we await to see if there is a change in the future.

I don’t believe there will be long-term damage to either demand or property values. People affect by the crisis will be replaced by those escaping cities or large towns. Being locked down in the Languedoc is like a dream compared to being locked down in a major city like London, for example.

What is negative is that people cannot really travel to purchase their property (apart from domestic buyers – French residents – who can travel anywhere in France) so I’d estimate more than 50% of international clients have to postpone their trip to 2021. I don’t get many emails saying “I’ve changed my mind.” Arguably the more quarantines and lockdowns there are, the greater the long-term demand for living somewhere like the South of France.”

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Adrian Lithgow, Agence Eleonor

“Our sector here in South West France is predominantly for retirement and second homes and COVID-19 as well as Brexit have had an impact on sales patterns.

It not all bad news, however, as there has been a marked interest from young professionals with young families who realise that they can work more from home, and France has a lot to offer with attractive house prices and excellent public services.

The main pull is towards rural areas and we have had interest not only from overseas buyers but also French city dwellers.

There is a large amount of stock on sale, a lot of it from the slowdown in activity originally from the financial crisis of ten years ago but also from Brexit, so prices have not yet risen in the face of increasing demand.

Whether they do will depend on the future economic outlook. We expect to benefit from COVID-19 and the fact that many people are rethinking how they want to live their lives in a more simple and connected way which one can do here, but if there is a deep and large scale recession then clearly that will be strongly felt not just here but worldwide.”

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Suzanne Pearce, Suzanne in France:

“I think the combined effect of Covid-19 and the fallout from Brexit will lead to a slowdown in demand from British buyers and international buyers.

There will always be a demand for city properties but the search criteria have changed to include at least a balcony or small garden. There is an increased demand for out of town properties with gardens in the French market.

There has been increased demand for people living in cities who want to move to the outskirts of town and benefit from more outside space.

Overall, prices are remaining stable in this area of North-West France.

There is an increased demand for renovated properties in the lower price ranges at the moment. I think we will find that the first 6 months of 2021 will become more difficult in terms of a reduction of the volume of sales to foreign buyers. Mortgage lending is tightening so there are more refusals of applications. There is naturally more worry around job security and a financial crisis.”

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Andrew Merchant, Cendrillon Immobilier (Properties in Limousin)

“There is likely to be a slowdown in demand from international clients yes, as France is still not allowing entry from countries like America and Australia, but the UK market is still strong.

We have no enquiries for city or town properties; all of our enquiries are for rural properties.

The domestic market has been very busy, and reports from the Notaires suggest it is the busiest it has been for 40 years. Most properties are selling at full asking price which we have not seen since 2007.

I forecast a reduction in demand next year and if COVID-19 continues then there could eventually be a property slump following this boom period.”

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Edward Landau, Le Bonheur Immobilier:

“Following the de-confinement we have seen a strong increase in demand which came as somewhat of a surprise. At the moment there are numerous factors which are impacting on the market and it is difficult to ignore the influence of Brexit which is also driving demand. The confinement period has driven clients to search more rural properties with outdoor space and good internet connection.

We sell more rural property but see a trend of clients leaving cities to seek out a more rural lifestyle.

The stock of properties is shrinking rapidly due to the unprecedented level of demand and registered sale prices are on the increase in most areas of France.

The appetite for travel and access to flights has been severely impacted by the virus and the economy is adjusting to the new normal. Some of the budget usually allocated to travel could well find its way into the property market through increased investment in second homes. The clients investing will probably be looking for ease of access with road, ferry and rail being favoured.

So much hangs in the balance. The virus will probably continue to motivate clients to seek rural homes where space and quality of life are the motivators whilst the general economy is likely to show signs of stress for several years to come. We have been surprised to see how many areas of the economy seem to be resilient in the short term. All the same we could be in for a rough ride if banks start to toughen lending policies.”

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Samm Khoury, Richard Immobilier:

“We do not expect to see a slowdown in demand from international buyers, Last year France overtook Germany for the first time as France took top spot for the country to invest in. We cannot, however, predict the future but are just going buy what we are experiencing here in France.

We are seeing less demand for large towns and cities, and are experiencing a lot of city folk purchasing in the countryside but not total isolated properties, they want train or easy access to the bigger towns and cities.

All the time we are seeing demand (which we are) then the property price will remain stable or only rise.

There are always people wanting to move to France, even if it’s not the Brits we are seeing Americans, Australians, Hong Kong Expatriates, and Europeans such as Dutch still having France high on their list of the place to live.”