We know a lot of people who had a property for sale in France for the last many months. Many homeowners tried every trick in the book to sell their property in France fast, but without success. Miraculously, most of these homes were bought within weeks after the recent Presidential elections in France, which was won by Emmanuel Macron.
Let’s call that the Macron Effect. Yes, the Macron Effect has been pretty strong on the property market in France. His victory in the Presidential race has set aside many worries that investors had about France. Now it is clear that France will remain a part of the European Union and there will be no “Frexit”. It is also clear that France will follow business friendly policies and make conditions more favourable for overseas investors.
There is a great deal of optimism in the air, says Hugues de La Morandière of Agence Varenne, a top real estate company based in Paris says in an interview with the Financial Times: “We’ve now got a powerful combination of positive factors for the market: low interest rates, the Brexit effect [ . . .] and the election of President Macron that has brought a wave of optimism.”
Home prices have been rising in recent weeks and are at their highest level in more than five years. You can now buy an apartment in France online at an average price of €8,800 per square metre (in Paris). This is already higher than the previous high of €8,462 last seen in 2012.
Charles-Marie Jottras of Daniel Féau, a top real estate specialist in Paris says, “Foreigners all say the same thing: it’s the Macron effect. With the uncertainty of Brexit and the problems of Theresa May we have lots of French nationals living in the UK who want to buy properties in Paris.”
He adds, “It’s as if France became a Garden of Eden to the world. I hope foreign investors won’t be disappointed.”
Mortgage rates are at historically low levels in France, at just 1.2 percent over 15 years and at 1.65 percent over 25 years. This is good news indeed.
This means conditions in the French property market have never been more favourable to buyers. Sellers are at an advantage too, because of the fast rising home prices. Indeed, France now competes directly with Spain for leadership in the overseas property market.
François Hollande, the former socialist president was deeply unpopular with foreign investors for introducing a 75 per cent supertax on all earnings above €1m. This had a direct effect on the property market, as it led to many wealthy people leaving France and moving to other countries such as Belgium, Portugal, UK and Switzerland.
President Macron is determined to reform France’s divisive wealth tax. He wants to lower the tax rate on those who make over €1.3m a year. He has also spoken out about the need to attract more property investment to France. There’s a lot of excitement in the property market in France and, one hopes that this continues for the foreseeable future.