Activity in the French property market continues to improve, say industry figureheads.
“The French property market regained momentum in the segment of property between 2 and 4 million euros,” says the international property auction specialist Barnes, who said it had conducted 49 auctions since the beginning year on “high quality” properties in Paris, against 15 during the same period in 2013.
“Even if the market has not recovered totally, prime property in Paris remains a very safe investment and continues to do well, “added the president.
This trend confirms a recent study by Athena Advisors, the French property specialist who has the largest network of French properties being marketed outside of France. Athena Advisors figures show that there has been an 87% increase in activity in the first half of 2014, compared to 2013 figures, with a particular increase in properties above €1.0m.
Of course these increases in activity can also be put down to the availability of French mortgages, which currently have very low rates, their lowest ever in fact.
“Since the start of the year government bonds have decreased by almost 70 basis points (0.7%) and this has pushed high street lending down even further,” said John Busby at French Private Finance. “These lowest-ever average rates are reflected in the lower margins on variable rates, as banks are being forced to be extra competitive for domestic and non-resident buyers.”
So Rate decreases on government bonds and an increasingly bullish buyer’s market in France have pushed mortgage rates down to their lowest levels ever recorded. But what has actually happened to the rates?Average lending rates have now dropped to 2.85% from the previous lows of 2.90% recorded in May 2013.
“In real terms for non-resident buyers rates as low as 3.25% fixed for 20 years can now be achieved, which compared to other mortgage rates in Europe is incredible value,” adds Busby. “Even before this latest drop, non-residents were capitalising on the market; in our busiest week across the ski property season we were handling non-resident applications with a total value of over €38m.”