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French Property Market Outlook

french property near geneva
Renovated 18th Century French Property Near Geneva

French property prices may have hit a plateau, but experts still expect the market to rise.

Some believe that the long term economic debt cycle is coming to an end and that a major global recession will result in lower real estate prices.

Others point to an inflationary shock that could cause a lasting change in the market.

The French property market remains highly diverse. Historically, France has been one of the most important markets for overseas investors, particularly British investors.

However, the UK vote to leave the European Union has reduced demand for property by 19 percent. This may affect the strategies of some UK investors.

Prices for new-build properties in France have increased 18 percent in the past three years.

This is a welcome increase, but it has only been partially offset by an increase in house prices.

New-build prices are expected to continue to rise, but at a slower pace.

Notably, the number of houses sold in France has stayed steady in the last year, with eight per cent of housing units being sold.

Older property prices in mainland France have continued to rise in the second quarter of 2022. These increases remain more significant for houses than for apartments.

Prime prices in the city of Paris have increased by 6.3 per cent, while prime prices in the province have risen by an average of 3 percent.

Houses are now more popular than apartments for foreign buyers. In particular, overseas investors are increasingly buying houses near or within two hours' driving distance from home.

There is also a strong interest from those with pegged currencies. During a period of instability, investors take refuge in rare metals such as gold or silver.

As the euro falls below parity with the US dollar, buyers are now able to purchase French properties at a discount.

Combined with a decrease in the demand for mortgages, this may have a negative effect on the housing market.

In addition, the number of mortgages approved in October fell 40 percent from the previous month.

In addition, the number of searches for French homes on the Knight Frank website has increased by 37 percent, with an average of three in every 1,000 searches being for a home.

Property price growth in France is expected to be between 2 and 3 percent next year. This is significantly lower than the growth in the UK. The economy is expected to grow at a rate of 1.5 percent.

While sales volumes are still high, prices are set to slow down in some cities, including Lyon and Le Havre.

For example, apartment prices are expected to fall in Bordeaux by the end of May, while in Rennes, they are projected to decelerate.

The latest report from the Notaires de France indicates that the volume of sales in the first three months of the year was down slightly from the same period in 2017.

Despite this, the total volume of transactions is still high.

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