Second home sales have been sluggish in 2012 so far and experts say it is very much a buyers’ market with significant discounts to be had.
While demand for seaside homes is still relatively strong, there are plenty of little country retreats up for grabs and mortgage rates are low – averaging 4% over 15 years, 4.25% over 20 years and 4.55% over 25 years, according to mortgage broker Empruntis, although access to credit from banks remains difficult with many insisting on a 20% deposit.
Estate agents’ body Fnaim expects property prices in 2012 to fall by 5%. Credit ratings agency Standard & Poor’s is expecting a 5-10% decline, and estate agents in some areas, such as the Pays de Caux in Haute-Normandie, are estimating price drops of up to 15%.
One in five French people who are considering buying a property say they would prefer to wait until after the presidential election in May, according to a recent study carried out by TNS Sofres.
The survey found buyers were “very hesitant” and “pessimistic” and wanted to wait to see what effect the election result might have on taxation and to see how the market and interest rates adapt. Some 37% of respondents said now was a good time to buy, down from 50% a year ago.
However, Suzanne Pearce, an independent estate agent in the Manche, says: “For British buyers it’s a fantastic time – money isn’t earning anything in the bank, they can buy properties that are around 30% cheaper than before the economic crisis and the exchange rate has picked up.”
She says traditional holiday homes around the €150,000 mark remain popular, and there were also signs of more expensive second homes – in the “traditionally difficult” €200,000-€400,000 bracket – starting to sell, albeit at a discount.
Ms Pearce adds that buyers are increasingly pitting sellers against each other, for example, by approaching three owners at the same time, with a fixed offer, and seeing how they react. She adds: “The prices that properties are advertised for are not at all the prices achieved.”
However, she says her experience is that French sellers are generally more reluctant to offer immediate discounts on their home: “They seem to hold on to a price for longer, whereas British sellers might let it go and move on with their lives.”
Pierre Bazaille, president of the Institut Notarial de I’Immobilier told Le Figaro that sales of rural homes had suffered since 2008 and showed no immediate signs of recovering from the economic crisis.
Bernard Cadeau, president of estate agents’ network Orpi also said in a recent interview that he expects the market to remain slow this year, as potential buyers are put off by the high costs associated with keeping a second home and prefer instead to take budget holidays and stay in hotels or on campsites.
There are some notable exceptions, including ski and beach resorts. In Biscarosse (Landes), for example, some estate agents have reported a 30% surge in sales at the end of last year, boosted by a rush to offload properties before the changes to capital gains tax on second homes came into force in February.