French house prices to remain stable

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Where next for real estate in Paris?

The Depardieu Case has generated considerable commentary. It is important to note that, beyond the “shallow” controversy triggered by inappropriate statements from some members of the Government, it is a real key issue. Sales of luxury properties in Paris have been dropping sharply since Francois Hollande’s election. Preliminary reports for 2012 revealed a decrease of almost 50% in transactions where the price is higher than 2 million Euros and, a decline of less than 30% for sales between 1 and 2 million Euros. According to the agency Emile Garcin, the second semester of 2012 has already seen a spiralling drop of almost 50%. What is the link with the Depardieu case? The flight to escape tax. Charles-Marie Jottras, Head of Feau network (a large French real estate agent), recently...

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December 2012: Currency update

Investors' impatience with the lack of progress on a permanent solution to the Euroland debt crisis (if that's what it still is) has begun to take its toll. From its position at the beginning of October the euro has fallen by more than two US cents. The euro has actually strengthened by a quarter of a cent against the pound over the same period but that bald statistic hides a fall of more than three cents for sterling during the first three weeks of October and a three-cent rally since then. The position of Spain has not really moved on. The general belief that it should apply for a bailout, triggering the European Central Bank support programme...

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Where can investors find the best French mortgage rates?

With a fixed rate of 2.95% over 20 years, the cities of Lille, Marseille and Toulouse remain the cities where you can find the best mortgage rate. The continuing decrease in the available French mortgage rates lead to an increase in property buyers affordability in 6 cities. In November, the best mortgage rates available have broadly stabilized and only declined in 3 cities out of 10. In Toulouse, Marseille and Lille, it is now possible to obtain a French mortgage at 2.95% over 20 years – subject to certain conditions of age, income and contribution. Now Aubagne and Marseille have got historically low rates particularly for borrowers under...

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Invest in a Student Residence through French leaseback

Student residences are becoming increasingly popular with investors attracted by good returns with low risks. This is one of the most profitable real estate deals but investors must pay attention to the reliability of the management company and the location. This market, neglected in the mid-1990s, has rebounded in recent years in the context of a shortage in the housing market. Today, France has approximately 340,000 designated student properties, whereas each academic year sees  more than one million students seeking accommodation in the rental market. Simplicity and efficiency Mainly composed of studios, student residences are...

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Mortgage rates keep on decreasing

Mortgage rates keep on decreasing in France and brokers say that it reminds them the situation of October 2010 where rates hit record lows. Some brokers in France have succeeded in finding the occasional unexpected fixed rate of 2.95% over 20 years for their French clients. Less than 3% for a repayment French mortgage over 20 years is a dream for many applicants. But the dream remains inaccessible to the vast majority of them even in this period particularly favourable. In fact, the lowest rates are only accessible for the best applicants that have a good financial health and are living in France. In fact it is hard to see rates being able...

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Bargains galore in the French high end real estate market?

The high end property market in France is facing a dramatic increase in supply as Francois Hollande Government announces a tax rise in the coming months. "It's nearly a general panic. Some 400 to 500 residences worth more than €1 million have come onto the Paris market”, managers of Daniel Feau, a Parisian estate agency which specialises in luxurious properties said to the French Press Agency. This huge increase in supply is due to the fact that the new Socialist Government plans to raise the tax rate to 75% on income above €1 million per year and to introduce a marginal tax rate of 62.21% on sales of stock, which has led some the...

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Increase in taxes for non-residents

The French National Assembly has just confirmed an increase in the capital gains and rental income taxes. Overseas owners will be required to pay the additional taxes for the current year as the law will be back dated. However, there is some good news as these taxes should not affect the majority of non-resident owners. France has many dual taxation treaties. In the case of the UK, the new rental income taxes are lower than those in the UK. Whilst, the new capital gains tax rates in France tapes to zero after 22 years. The French government expects to receive extra income from the increase in property taxes. Now overseas owners will be subject...

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French government to rescue Credit Immobilier de France

The French government has finally nationalised the Credit Immobilier de France which has been weakened by a liquidity crisis and a failure in the search for a buyer since May.  “To allow the CIF group to respect its overall commitments, the state decided to respond favourably to its request to grant it a guarantee” said Finance Minister Pierre Moscovici on September 1st. The country would provide a 20 billion euro guarantee without spending taxpayer money. However, the bailout is still subject to the approval of the European Commission. Prime Minister Jean-Marc Ayrault has reassured French citizens saying in a radio interview that, “The...

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