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Should you be selling overseas property in France in 2020?
This is as good a time as any to be selling overseas property in France. But whether you go ahead with the sale will depend on factors such as your financial situation and specific personal circumstances – whether you need to sell the house as a part of the divorce proceedings, and so on.
What is important is to be aware of what’s happening in the overseas property market in 2020. We are only two months into 2020 and already a lot has happened – Brexit is done, the new CaronaVirus epidemic has almost shut down China from the rest of the world.
Here are France Overseas Property Market Trends 2020
#1: Brexit is now done and dusted.
The overseas property market in France is closely related to the UK. That’s because Britons are the biggest buyers and sellers of overseas properties in France.
But because of the uncertainty over Brexit, many British expats in France stayed away from the market. Some sold out and moved back, while others adopted a “do nothing” approach, waiting to see what would happen next. The decline in the number of homes bought by British buyers was only marginal though, going from 8,296 in 2016 to 7,812 in 2017.
Now finally the uncertainty is gone. Prime Minister Boris Johnson has been emboldened enough by his big win to go ahead with Brexit, make it final, for once and for all. So regardless of whether you’re on the Leave side or Remain side, it’s a good thing because now we can all move on!
We expect the action in the French property market to get more interesting. There will be a lot more people buying and selling overseas property here, which should push up prices significantly.
#2: But what about Coronavirus?
Yes, there is a lot of concern over Coronavirus right now. Stock markets across the world have taken a major hit because of the fear that it could spread beyond China. China, of course, has been virtually shut down to the rest of the world.
The overseas property market, needless to add, cannot remain isolated from all of this. However, the effect on the property market is not immediate or instantly visible as on the financial markets.
The buying interest in French properties is on the rise. Wealthy, cash rich buyers from Sweden, Norway, Russia, Middle East, and Britain are buying. The Chinese are buying too, although the Chinese interest has gone down over the last 2 years.
#3: Property prices will go up…however…
While there is no question that property prices are on the rise in France, the extent by which they go up will depend on factors such as the interest rate regime, ability of banks to lend more, tax cuts and GDP growth.
Home prices in certain areas such as Nantes, Bordeaux, Metz and Saint Etienne should continue their upward trajectory. We expect popular tourist haunts such as Toulouse and Montpellier to do especially well – properties here should fetch a premium.
However, there are certain regions such as Dijon, Poitiers and Le Harve that are not all that popular with overseas investors. Here property prices may not go up by much, unfortunately.
#4: Government action should help boost sentiments.
The markets have always shown a lot of confidence in President Emmanuel Macron. He is clearly the most pro-business leader that France has had in a while. However, Macron is not all that popular with the general public and there is a cloud hanging over his political future.
The Government of France under President Macron has done a lot to boost investment in the property market in that country. The PINEL law, for example, is a landmark provision that incentivizes people to invest more in the new-build property market through tax benefits ranging from 12% to 21% of the sale price.
While this law is targeted at first time buyers only, it should help boost sentiments in the property market and is a net positive for everyone involved.
The mortgage rates in France are at a multi-year low right now. One can opt for a fixed rate mortgage starting from 2.15% and a repayment mortgage at 1.24%.
Contact an overseas property expert to know more about selling overseas property in France.