French Fancy

Abode2 sits around the crystal ball with Joanna Leggett of Leggett Immobilier, the leading international estate agency in France, to see if can gleam an insight into what's going to happen to French property prices in 2024

Everybody has an opinion, but before we give ours, let's look at some of the factors that will shape the reality.

The best place to start is by looking at where we are now. After years of unprecedented growth, 2023 was the year that the overall French property market hit the brakes (in common with most European countries). According to the Notaires de France bilan de 2023, total sales fell from 1.1m to 928,000 and prices fell by an average of 1.6% across the country. That means that there was a drop of 18% in the number of houses sold, yet prices were hardly affected. After all, if they had been rising for years then a fall of under 2% is barely noticeable.

Of course, these are national statistics, and we all know that the market in rural France is totally different to central Paris, Nice or Courchevel 1850.

This fall in demand can be attributed to two main factors:

• The war in Ukraine, and global political/economic uncertainty led to a huge hike in energy costs and general inflation. Anyone looking to renovate their property will know that a trip to M Bricolage can now seriously deplete your bank balance, and that the cost of hiring local artisans has risen proportionately.
• French banks pulled their belts in and tightened their lending criteria. Not only were mortgages more expensive, but they were much harder to come by. In September, Le Monde ran an article headed “Homeownership in France: a fading dream” citing that, last summer, the average mortgage rate had risen from 1% in December 2021 to 3.8%. Indeed, the volume of new housing loans nearly halved (from 18.9bn euros to 9.9bn).

“What was evident last year,” says Joanna, “was that vendors wanted to sell at 2017 prices, whilst buyers wanted to pay 2023 prices. This led to the dramatic (18%) drop in sales, and a headache for estate agents as we tried to negotiate between the two different viewpoints.”

“Anyway, enough of the past,” she hastens “We all want to know what's going to happen to prices this year….”

However, as we all know, and as Joanna points out: “Sadly, we don't know. Nobody does.”

Last week France welcomed our youngest ever Prime Minister, and he will attempt to relaunch President Macron's centrist presidency. Elsewhere, this year sees elections in the USA, UK and neighbouring Belgium. On the plus side, the Olympics will showcase France to the world, and British buyers will be hugely boosted by the fact that the Senate backed the automatic visa right for second-home owners.

Ultimately demand remains strong - if vendors are sensible with their pricing they will sell. Buyers will see wider choice and will be able to drive a hard bargain. “As an educated guess, we think that prices will continue to gradually drop across the country (3-5% nationally)” Joanna adds.

The best piece of advice for selling at this tentative stage of a new year is a simple classic: If you have had your house on the market for a while, and it hasn't sold, then think about reducing the asking price to get the sale.

As we are only 4 weeks in of course we are still very much at a wait-and-see phase for a year review, but it’s a big year politically across the world and France will have more than its turn in the spotlight on the world this year, so all is falling into place for a strong year for the market here. However, it all lies in the hands of the movers and shakers, the buyers and sellers to determine what the end-of-year report will say.

Joanna's parting advice is: “Above all, it's important to keep in mind that France has one of the strongest and most secure property markets in Europe, as well as offering a terrific quality of life. Bonne année!”

www.leggettfrance.com