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PROPERTY

Where in France are property prices are starting to dip and by how much?

Half of France’s 35 largest cities have seen property prices fall by as much as 3 percent in the last three months, figures show.

Where in France are property prices are starting to dip and by how much?
(Photo by PHILIPPE HUGUEN / AFP)

After two years of steadily rising prices across France, the property market is starting to change. Three of France’s 10 largest cities saw falling house prices in October, rising to six in November, and – as of now – the property market is dipping in eight of the biggest conurbations in the country.

Only Lille and Marseille continue to show slight increases in property prices, respectively of 0.7 percent in Lille (to €3,567 per square metre) and 0.8% in Marseille (€3,868 per square metre) in the past month.

On average, France’s 10 biggest cities saw a 0.1 percent fall in property prices in the last month – not a large fall, but an indicative one, according to the experts. Over the past three months, property prices have gone down in 18 of France’s 35 largest towns and cities.

READ ALSO A buyer’s market? How French property prices are set to fall in 2023

We are entering a new cycle,” Thomas Lefebvre, of online property agent Meilleurs Agents, told Le Parisien. “We are not experiencing a correction, nor a stall in terms of prices, but rather a downward cycle that is spreading to all of France’s major cities.” 

While the winter period traditionally sees a slowdown in sales, rising interest rates are also preventing property hunters from putting in offers, Lefebvre added, with renters now waiting eight years on average to take the plunge into property ownership, compared to four years as recently as 2020.

READ ALSO Courtier: Should you hire a broker when buying property in France?

Increased inflation and soaring energy prices are also having an impact, leading to what Lefebvre described as a “market freeze”, with fewer buyers and sellers still reluctant to accept lower offers.

As a result, the number of sales agreements has dipped between nine and 10 percent on an out-of-the-ordinary 2021 property market, according to the Orpi property cooperative.

READ ALSO EXPLAINED: Time-frame for buying and selling property in France

The length of time it takes for a Parisian property to be sold has jumped five days to an average of 68 days, in 2022, while the average price per square metre in the capital has dropped 1.3 percent to €10,312 on average – a figure inflated by high-end properties.

While 60 percent of property sales in Paris are still above €10,000 per square metre, at the lower end of the market prices have dipped below the threshold for the first time in several years.

READ ALSO Revealed: The ‘hidden’ extra costs when buying property in France

Bordeaux, meanwhile, has seen property prices drop 3.1 percent in 2022, and 2.4 percent in the past three months alone; while prices have fallen 3.4 percent in Mulhouse in the last three months after jumping 2.6 percent earlier in the year, and have dropped 3.1 percent in Nîmes and Rouen.

But, although prices are starting to fall in larger cities, the opposite is true in satellite towns where transportation is good, as buyers start to look further afield.

READ ALSO MAP: The 20 cheapest French towns and cities to live in

In Chambéry, between Grenoble, Annecy and Lyon, the Laforêt Immobilier group has recorded an increase of more than 50% in its sales – it’s location is ideal for all cities, while the rise of remote working allows for the possibility of just one or two commutes per week.

Here are average property price changes the 20 biggest towns and cities in France:

City

Percentage price change
in the
past 3 months

Percentage price
change
in 2022
Mulhouse
-3,4 percent
2,6 percent
Nîmes
-3,1 percent
1,3 percent
Rouen
-3,1 percent
2,2 percent
Rennes
-3 percent
3 percent
Dijon
-2,9 percent
0 percent
Strasbourg
-2,9 percent
2,4 percent
Angers
-2,7 percent
1,2 percent
Bordeaux
-2,4 percent
-3,1 percent
Aix-en-Provence
-2,3 percent
5,9 percent
Boulogne-Billancourt
-1,9 percent
0,1 percent
Le Havre
-1,6 percent
-0,8 percent
Toulouse
-1,3 percent
1 percent
Paris
-1,3 percent
-1 percent
Lyon
-0,9 percent
-0,1 percent
Saint-Denis
-0,9 percent
4,5 percent
Brest
-0,3 percent
1,6 percent
Montreuil
-0,3 percent
3,8 percent
Limoges
-0,2 percent
5,4 percent
Nice
0 percent
6,1 percent
Nantes
0,1 percent
3.4 percent

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PROPERTY

What restrictions are there on foreigners buying property in France?

Purchasing property in France as a foreigner has several extra hurdles - here's a look at some of the restrictions and other challenges you will want to be aware of beforehand.

What restrictions are there on foreigners buying property in France?

There are several things to consider before buying property in France. You may want to visit the area during different seasons to be sure that you enjoy it rain or shine, and you will want to consider how much you would end up paying in property taxes, as well as whether or not it will be a main residence or second home.

The law

Let’s start with the good news – there are no official rules in France against non French-citizens purchasing property, neither is there any requirement to be resident in the country in order to buy property – indeed foreign second-home owners make up a small but significant slice of the property market.

Revealed: Where in France do foreigners buy second homes

But in practice there are a number of challenges foreigners face when buying French property, especially if they need a mortgage.

Property sale process

Before making your decision, learn the steps to buying property in France and the expected timeline.

Roughly, there are five steps: making your offer, a cool-off period, signing a ‘Compromis de Vente‘, providing the notary (notaire) with your deposit, and signing the ‘Acte Authentique de Vente‘ (deed).

READ MORE: How long does it normally take in France to buy a property?

The French property purchase system is likely to be different to what you are used to – especially the role of the notaire.

Also Americans might be surprised to learn that in contrast to the US system of having a realtor who guides you through the entire process, in France – as in most of Europe – buyers are expected to do much work of the house-hunting work themselves.

Bureaucracy

There are a few extra steps added if you need a mortgage, but generally all foreign buyers should be prepared to have a valid ID (passport), as well as other documents including your marriage and/or divorce papers (to demonstrate your civil status).

At some point in the process, you will need to open a French bank account, even if that ends up just being for utilities after you’ve made the purchase. The earlier you can open a French bank account, the better.

You should know that purchasing property in France does not automatically give you residency rights. If you are not an EU citizen, then you will need a residency card or visa to spend extended time in France.

READ MORE: EXPLAINED: What type of French visa do you need?

Getting a mortgage

While there are no laws stopping foreigners from buying property in France for most people the biggest obstacle is getting a mortgage, as there are conditions that many foreigners cannot fulfil.

In France, the vast majority of loans are guaranteed by banks, and one bank’s offer to you may not be the same as another’s. You are free to contact several banks to find the best offer for your situation.

READ MORE: French property: How to get a mortgage in France

While there are alternative options besides banks, such as a ‘vendor loan’ (prêt vendeur) – where one sets up a credit contract directly with the seller of the property via a notary – this is much less common.

The biggest issue is that banks will require that foreigners prove that they will be able to legally remain in France for the entirety of the repayment period. As such, it can be very challenging those on short-term residency cards, to be accepted for a mortgage loan.

For the same reason, it is very difficult for non-residents to get a mortgage via a French bank.

Foreigners can also consider international options, or independent, specialised mortgage brokers, like those geared toward expats – however some have minimum income levels and minimum property purchase prices.

Another point to keep in mind is the fact that French banks also look favourably on ‘stable’ employment statuses, such as CDI (indefinite) work contracts, which, by their calculation, reduce risk of unemployment. It’s not impossible to get a mortgage if you are self-employed, but it’s harder.

Additionally, age can be a factor – lenders tend to be less likely to award mortgages to those nearing or above retirement age.

Americans – The situation is even more challenging for Americans in France, as banks can be reticent about working with Americans due to FATCA – which, according to the US dept of treasury, requires that “foreign financial institutions (FFIs) report to the IRS information about financial accounts held by US taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.”

This has forces French banks to collect and maintain more information about their American customers. If the banks fail to disclose information to the IRS, they risk exclusion from the US market as well as penalties.

In a survey about the effects of citizenship-based taxation on Americans in France, one respondent said: “Multiple banks have denied me a mortgage because I am American.

“We used the services of a mortgage broker and when we went in for the final presentation a few weeks ago, only one out of the many banks queried offered us a mortgage, and it wasn’t even a good offer.”

READ MORE: Divorce, stress and fines: How citizenship-based taxation affects Americans in France

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