New build property in France - the current climate

Patricia Fevrier, of A Place in France new property specialists, gives an overview of the French property market situation and discusses under what circumstances you can purchase a new property with price incentives.

There is a slowdown on the French market mainly due to the malaise about the pouvoir d’achat of the French people (purchasing power) well documented in the press. The sector worst hit seems to be the buy-to-let market (leaseback schemes, residential lettings) which is now oversupplied and where the levels of income guarantees are dropping.

There is still a strong demand for accession à la propriété (first time buyers), and properties purchased as a main home (working families or retiring couples looking to downgrade), and for family holiday homes.

New build prices which at the outset may look higher than those of resale properties, in fact reflect the market costs of materials and labour and the compulsory implementation of ongoing new building regulations and energy efficiency measures. The construction industry in France is highly regulated and developers by law have to meet the government standard, a reassuring thought for our buyers.

In the current slowdown where buyers are unable to raise financing, French developers are more likely to delay the launch of new developments rather than bring prices down as they have already committed themselves to the price of the land and to their subcontractors’ labour costs. There is however an opportunity for French property buyers to purchase properties in nearly completed or completed developments where the developer is prepared to offer incentives to sell the homes which remain.

Due to stringent lending criteria France is not suffering from the same credit crunch negative effects as the UK and it is encouraging to know that UK purchasers are still able to raise a French mortgage against a new build property purchase.

Patricia Fevrier, founder and Managing Director, A Place in France, FrenchEntrée New Build Zone Sponsors.