The Property Market in South West France in 2012

Fresh snow on the Pyrenees in time for Christmas

I have just been reading through the swathe of end-of-year reports from various estate agent groups, notaire’s associations and finance companies in order to get an overall picture of how the French property market has performed in 2012. They make interesting and confusing reading which pretty much sums up the property market in this part of France. Having started the year with low expectations of client numbers, I have in fact been hugely busy but there has been absolutely no pattern throughout 2012 either in types of buyer or the sort of property I have been asked to find. And budgets have also been right across the scale. So what is going on according to those in the know?

Well the latest figures published by the ‘Notaires de France’ show that prices have fallen nationally by 3% in 2012 although this figure hides some notable falls in certain areas and rises in others (prices around Toulouse have actually risen by 4.5%). Over the past year, FNAIM, the national association of French estate agents, reports that house prices have fallen by an average of 1.3%. There has also been a substantial fall in property sales with both Notaires and estate agents reporting a slump of around 20% in the volume of sales despite the record low mortgage rates, at around 3.3%. Much of this is to do with the banks who have introduced tougher lending criteria with the result that mortgage lending is down by around 30% in the past year, a record fall and this is keeping the market subdued. Those departments that have continued to show positive growth in house sales over the past four years are Haute-Garonne, Gironde, Indre, Savoie and Haut-Savoie.

In this region, there has certainly not been a noticeable drop in prices actually asked this year but I have noticed that sellers are being more realistic about accepting offers below their asking price and this seems to have revitalised the market here and kept things moving. This means that 2012 has been a buyers’ market which is ideal for my clients and I would guess that this will continue into next year. Village properties have also been very popular this year, perhaps because of the generally lower price range and properties needing total renovation are also in the frame again as are part renovated properties which are habitable though in need of some finishing, as long as the price is realistic and reflects the work to be done. In addition, demand for luxury and high end properties in good locations is also strong, thanks to a lack of domestic buyers which has opened up opportunities for British and international buyers to snap up desirable properties.

So how to sum up the property market in this region in 2012? Well, despite the continued uncertainty in the Euro-zone, France stays consistent in its appeal to foreign buyers and I can’t see that the wish to own a small part of this beautiful country changing any time soon. Certainly the lower risk factor of buying property here keeps buyers and investors interested and the very low mortgage rates, tight controls and the weakening Euro mean that French houses are still very good value. And while property in this region hasn’t been reduced to bargain basement prices, it generally remains well under UK averages with plenty of properties available within any budget.

So despite the widely varied reports on the market from different sectors of the industry, 2012 has been a relatively stable year for French property in my region. Sellers have become more realistic about the price they are likely to get and buyers seem to be more flexible in the kind of property they are looking for and the compromises they are prepared to make. This is keeping the market moving and property here has been a very good investment in 2012.

I don’t have a crystal ball and I hesitate to make any predictions for 2013; I don’t think anyone knows what is going to happen in the financial world and European crisis next year but I have every confidence that, for anyone who wants a beautiful French house in a stunning location combined with a fantastic quality of life and a lovely climate, this part of the Midi-Pyrenees is one of the better places in the world to spend money on property. But that’s not a prediction, just a personal viewpoint...!

I am taking a break over Christmas and the New Year and I shall be ‘un-connecting’ from every type of communication device! I wish you all a very happy Christmas and New Year and look forward to unearthing some more dream properties in 2013.