Larger houses struggling to sell as post-Covid boom disappears

Purchasing power is decreasing but for those with funds, it remains a buyer's market 

Sellers of larger country houses should not price them too high

Larger detached houses are struggling to sell – in a reversal of the situation a few years ago, just after the Covid pandemic.

Then, city residents urgently sought space and fresh air, but now, large detached family homes are hanging around on the market.

Mortgage rates for a 20-year loan also passed the 4% mark early this year, four times more than in 2021.

This hit buyers’ purchasing power, although rates have recently dipped to around 3.7%. This makes it a buyer’s market for those with cash.

'Shortage of nice cheaper properties'

Trevor Leggett, commercial direc­tor at the Leggett Immobilier network of English-speaking agencies, said prices are somewhat kept up by a lack of property, as people who signed a few years ago for mortages at 1% are reluctant to sell.

“And there’s a shortage of nice cheaper properties, but in the mid to high-end market, there’s less demand. A few years ago, we saw a lot of Parisians and Bordelais buying with a view that they might move to the countryside, but a lot have decided it is not for them.

“So it is very much a buyer’s market – though it remains a seller’s market at the bottom end. Nice homes at €200,000-250,000 are still in demand, especially from British buyers, who now struggle to get mortgages due to Brexit so their budgets are lower.”

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If sellers are “reasonable” over prices, homes are selling.

“As long as they don’t expect to get the prices we saw during Covid, plus to cover their notaires’ and agents’ fees, which is about 10-11%.

“That is the sticking point – they are having to swallow that.

“The market is also suffering from inexperienced agents who are putting things on sale for ridiculous prices in order to obtain an exclusive mandate,” he said.

“Something spectacular – beautifully renovated – will always sell for a good price,” he said. “Especially now, with renovation costs at around €2,500/m2.” 

Price drops are beginning

Property-selling coach Maylis Guinebert, of Akompagn’Toit, said: “We’re in a dropping market, and the buyers are not there once you are over €500,000. Price drops have begun but more is needed to counteract the rise in interest rates.

“It is also an election year, which tends to encourage people to wait. There had been significant price increases but the bubble has burst.”

She added: “My own house is on sale, in a district where a year ago it would have been snapped up in a week, but there have only been two visitors in a month.”

One tendency is more ventes à terme, where the buyer pays only part of the price, then monthly amounts for an agreed period, which can be 10 to 20 years. “It helps people to buy without having to get a bank loan,” she said.

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Sellers must be attentive to the presentation of their home, with good photographs, and anticipate any issues. For example, if there are three bedrooms or more, buyers expect a second bathroom.

So bear anything in mind in the price and perhaps get some quotes you could show buyers, she said.

Overpriced homes are not selling 

Eric Allouche, head of the large Era Immobilier network in France, said very high-end properties are not affected as there are still wealthy buyers with cash.

“Prices have generally lowered across the country, with exceptions, such as Nice and Cannes, and in some coastal areas of Brittany. Places that have had major drops include Nantes, Bor­deaux and Strasbourg, due to the fact there are fewer buyers, as well as some districts of Paris.

“But the market is holding up nonetheless, partly because there is a lack of new-build.”

Buyers of large houses now expect them to be in a good state.

“Perfect homes are selling but it is harder now for a property with defects or a bit atypical.”

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Overpriced homes stay on the market “unlike after Covid, when everything was going at any price”.

He advised that if you find a buyer, do not hesitate to sell, as we face uncertain times and if the economy worsens, then mortgage rates might increase again.

“You must live day to day and not try to have a crystal ball.”

1,200 estate agencies have closed in France in a year – 114% more than in the year before – due to the property slowdown, the Fédération nationale de l’immobilier reports.