Property Update: “What Is the Market like at the Moment?”

This is probably the most asked question about the French property market. Typically my response would be, “Oh, you know, pretty steady…”. The French property market is historically very stable. Dare I say, even unexciting. In 2020 though, when all bets are off, the market has been pretty turbulent, which is unusual for France.

Right now, I’d say we’re probably beginning to shift gears a little. We and our partners in France have had a frenetic few months after lockdowns eased in France and the UK. All that pent-up demand from buyers and vendors came spilling onto the market; we received a bumper number of enquiries and our partner agencies were exceptionally busy.

As we enter the ‘off-peak’ seasons of Autumn and Winter things naturally get quieter, as you’d expect.

Let’s take a look at how different nationalities are experiencing the property market at the moment:

Domestic/French Market

Obviously the domestic French market accounts for the vast majority of transactions in the country. It is always going to have a greater impact on movement and pricing than the relatively modest number of international transactions. That being the case, many of our partner agents have been exceptionally busy with domestic clients. Unlike a British or American buyer looking in France, for someone French looking to move within the country, it (usually) isn’t a discretionary purchase. It could be a job move, family reasons, personal situations etc – but they have to move, as opposed to wanting to move. The 3-4 month lockdown in France meant that all of these necessary moves hit the market like a tsunami in June/July, keeping everyone busy.

It also, curiously, had an effect on the availability of stock for the international buyers. Often the types of properties that the French look for are quite different those a Brit or an American would look for. But in a COVID world where everyone is much more cognisant about space and social distancing, we found that many French buyers were looking to move further out from cities to get some more space. If they were selling an apartment, for example, they’d look to the suburbs. If they were in the suburbs, they’d look for something semi-rural with good road or rail access into the city.

Equally, as with many of us, working from home suddenly became the norm – and looks like it is here to stay. For families in particular, where either or both parent had to commute to work, suddenly the idea of living and working from home in the countryside became a real possibility.

Combine that with the increased Brexit-related demand from British buyers (see below) and there was this perfect storm of the domestic and international buyers looking for similar properties. Agents in Normandy and Brittany reported selling the majority of properties at their asking price. In some cases there were even bidding wars and people being “gazumped” – which very rarely happens in France, as the market is not usually that dynamic!

British buyers

British buyers who were looking to buy a property in France and move permanently before the end of the Brexit transition period on 31 December 2020 have either made an offer and started the process, or largely backed off. If they haven’t signed a compromis de vente by now – mid October – chances are they’ve missed the boat. The British demand is now slowing down for that reason, and dividing into a number of different groups.

The Undecideds: Those buyers looking to move over permanently by the end of the year, but haven’t secured a property yet, now have to decide if they put the idea on hold for a while, or find somewhere to rent. Equally, with the threat of a No-Deal Brexit hanging over us, I suspect many would-be British buyers will simply be on the fence. They’ll now wait to see what happens with Brexit, COVID and Trump, maybe let the dust settle and look again in the Spring or Summer – fully appreciating they won’t have the same EU rights as they do today. But, you can’t have everything, and there’s still the sunshine and the wine, right?

The Come-Hell-or-High Waterers: These buyers are determined to obtain residency in France before December 31st, and are going to secure those valuable EU rights no matter what. If they haven’t found a property to buy yet, with time running out, they’ll switch gears to renting. Look in any Facebook group or forum at the moment and it is plastered with requests from Brits looking to rent somewhere for 3-6 months while they find the house of their dreams. Equally, there are scores of helpful gite owners – whose income has been seriously dented by COVID – offering an “attestation d’hébergement” to anyone looking to rent one of their properties. Hopefully there can be a meeting of minds here along with some mutual back-scratching and solutions can be found.

The Chilled-out-Cucumbers: For this group, there was never any pressure to buy before the end of the year. They weren’t planning on emigrating to France. They are looking for a holiday home, a résidence secondaire, somewhere to use two or three times a year, and maybe get a bit of rental income to cover the taxe foncière and the utility bills. . These British buyers are being very patient. They have tried not to get caught up in the frenzy of the last few months where demand has pushed prices up – with many sub-€200k properties going for their asking price (very unusual). They might pop over in November or December (assuming quarantining isn’t a problem when they get back to the UK) but I hazard the majority will continue to do desk research between now and February/March. Hopefully by that point COVID isn’t so much of an issue, agents will have more time on their hands and prices will be “back to normal”.

International Buyers

Currently US citizens are not allowed to travel to the EU, and so viewings on the ground by US buyers has largely dried up (unless they happened to be in France when lockdown hit). With no sign of the pandemic on the other side of the water slowing down, combined the a second wave in Europe and very high numbers in France itself, who knows how long it will be before our lovely US clients will be able to come to France and view some properties. Lots of virtual tours taking place, lots of desk research again, but obviously limited as to how far they can go. Whilst it is relatively common for British buyers to buy remotely – with live tours and powers of attorney for the Notaire – with buyers from the US, Australia etc this is far less common. Whereas British buyers look at a very broad range of products, majoring on lifestyle, US buyers often have investment at the front and centre of their search. Apartments in Paris, the Alps or Côte d’Azur, classic French Manoirs or Châteaux to generate income – with budgets typically over €500k – US buyers are often looking for products and in regions which are very different to the Brits.

Australians are seen less as carriers of plague than Americans, but international travel restrictions mean that they are unable to fly to France and view properties. From what I’m reading it looks like mainstream international travel won’t fully reopen until the back end of 2021, start of 2022 for Australians. In the meantime it’s all about researching the areas, understanding what their money can get them, and not falling in love with any one property!

We see a reasonable flow of buyers from other EU countries looking to buy in France. As an example, at the moment I’m working with a Belgian couple who are looking for a serious equestrian property in Normandy, budget up to €800k. Hopefully when we have a shortlist of two or three properties, they’ll simply be able to drive down to view them. This morning I heard from some Dutch clients that the Netherlands government has issued a travel warning for France – which is experiencing seriously high numbers of COVID cases in the major conurbations – and so they’ve postponed their viewing for the time being. As far as EU buyers are concerned I think we’ll have these “stop-start” fluctuations for the next 3-6 months. Some will be able to hop in their car, drive down, have a socially-distanced viewing and head back – and others will wait it out until the Spring.

In conclusion, my answer to the question about how the market is doing at the moment is probably…”Weird”.

We keep our fingers and toes crossed that a workable solution can be found for us to live with COVID over the next 6 to 12 months until (if?) a vaccine is found.

We hope that international travel isn’t completely off the table in 2021 and that our American, Canadian, Australian and Kiwi clients can come and spend some time in lovely, lovely France.

We hope that Messrs Johnson, Gove and Barnier find some kind of deal before the end of the year, as this will provide British buyers with some level of reassurance that moving to France (and, by extrapolation, the EU) isn’t a complete gamble.

Finally, we wish our British buyers the best of luck in securing residency before the end of the year, whether that be through buying a property or finding somewhere to rent!

If you’re looking to buy in France in 2021, and you haven’t already done so, we’d invite you to register as a member with FrenchEntrée or let us know what you’re looking for and we can introduce you to some of our partners on the ground in France.

We can also provide guidance on financing your property, making sure you get the best currency rate and introduce you to specialist legal, tax and financial services partners.

ALISTAIR LOCKHART – FRENCHENTRÉE PROPERTY DIRECTOR