Do I or don’t I? The French property waiting game

Timing is everything in the property world. As French mortgage rates dip lower and lower, the Euro has followed suit, dropping to headline generating lows against all major currencies.

With all this feverishness in the market, more non-resident buyers are capitalising on French property than ever before and a big chunk of these are from France’s neighbours on a cold foggy island north of the channel.

The stiff-upper-lipped wait-and-see-ers of 2009-2013 are metamorphosing into the now-or-nevers. Soft prices, low rates, great margins in the currency; you have the three main ingredients for a heady mix, easily enough for the average property investor. For those who shut up shop on a French property in 2008, they are seven years older they just want to get on with it. Now is the time. Yet the word still on every buyer’s lips is ‘when?’

fpf-infograph-150303-rates and currency Mar-Mar

Long term, French mortgage rates will remain low, at least for the next five to ten years. Therefore the two main areas, which could be more changeable, are property prices and the Euro. From a French perspective, both of these will be affected by Mario Draghi’s quantitative easing programme. More financial liquidity in the Eurozone will increase positive sentiment strengthening the Euro and its core real estate markets.

In the short term, the UK general election is primed to be quite the market mover, especially as it roughly coincides with the changes to the way Brits can access the money stored up in their pensions.

One way to look at it could be that if the average British buyer is thinking of purchasing in France this year, in order to maximise savings on the currency they will need to get a move on before the mudslinging happens. Otherwise it may be best to take a view on it afterwards.

The only problem here is that, with French property markets in highly popular areas moving as fast moving as they did back in 2006, those that wait a few months, or even weeks, will miss the boat.

Of course, if your targeted property is a rustic pile in Dordogne and not a piste-side apartment in Savoie, then you can probably relax a little more, but if you can afford it now, seriously, why wait?

Lloyd Hughes, Marketing & Communications, French Private Finance