Should You Invest?
Lifestyle and investment purchases are two very different
procedures which take into account differing criteria. Whilst good
investment potential is judged on rental returns or long-term
capital gains, a lifestyle purchaser will make their buying
decision based on other features such as the quality of appliances
and amenities and other aesthetic aspects. As far as France is
concerned then, those looking for low costs and fast, high returns,
may find that this country is not as suited to investment perhaps
as it is to second home and lifestyle purchases.
- French capital growth currently stands at around 10% per annum
and although this figure is lower than in many of the riskier new
emerging markets, French property does offer stable growth and a
safe tried and tested marketplace in which to invest.
- Prices in France are generally much higher than they were ten,
or even five, years ago but there are many areas of the
country that are still affordable..
- The cost of living in France is fairly reasonable in comparison
to that of the UK, especially in rural areas.
- Much of France's appeal remains untouched, and many are still
drawn to the relaxed Mediterranean lifestyle and laid-back approach
to life.
- The country's size means that there is a great variety of
property available.
- Rental investment potential is achievable in the cities, and a
number of savvy buyers appear keen to take advantage of this.
- The country also still has great potential as a tourist
destination, with both summer and ski resorts, an absorbing culture
and a mostly temperate climate.
- There are good connections and easy access from the rest of
Europe.
Rental Yields
The higest rental yields in France are found in prime tourist
destinations and major cities. Several low budget airlines are now
linking France with other European countries which is encouraging
tourists to holiday here. Investors looking to see healthy returns
should look at investing in Paris, the country's capital or
selected property within tourist resorts. The majority of French
residents rent their homes and with such a thriving tourist
industry the rental market in France is very healthy. The rental
market is strong thus good yields can be achieved, but these vary
according to region and demand.
Price History
For years now, France has been one of the countries with the
most vibrant housing market in the EU and substantial house price
increases have been occurring over the last ten years. Prices of
new-build properties have risen by an average of 10% a year over
the last decade, while in more popular areas such as the Côte
d'Azur and Paris rises have been as much as 20%.
However, there is evidence to suggest that this hefty rise in
property prices is gradually slowing down. Growth of 15.5% was
registered in 2004 when the market was at its peak, whereas figures
from the FNAIM show that prices rose by only 3% over 2007.
According to globalpropertyguide.com the strongest housing markets
of 2007 were found in the south east of France and in the Ile de
France region. The south west of France was the weakest performing
market of 2007.
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