France has long been a destination for overseas real estate investors, largely due to its highly regulated and secure property market. Perhaps the simplest way of demonstrating this is with the percentage of real estate transactions which have required some form of litigation. In the US over 9% or transactions result in litigation, whilst across the EU the average figure is 3.9%. However in France the figure is dramatically smaller at less than 0.4%.
No property market in the world could manage this without secure buying processes that protect both foreign and domestic investors at each and every step. Thanks to its neutrality, well-structured business sector, political and economic stability, and its unquantifiable cultural appeal France remains a popular place to buy property.
All experienced property investors know that whilst many different factors can affect a property market (interest rates, politics and even the weather) there is only one factor that can move a market quickly; this is supply and demand.
In France’s most popular areas of the Cote d’Azur, the Alps and Paris supply is low and demand is high, and this has been the case for some time. In most cases, this low supply in prime areas if often cause by natural or man-made geographical boundaries.
In the mountains, prime high altitude ski resorts are constrained by the natural boundaries of the various valleys and in the South of France there is very little developable land close to the sea, making real estate in either locations a highly saleable commodity.
As for Paris, its central districts are bordered by a man made boundary – the Périphérique ring road. Unlike London which is relatively spread out, Paris was contained by the Périphérique during the 1970s and today’s strict building regulations mean that developers are rarely allowed to develop new-build property and no construction is allowed above seven floors. This means that new-build properties are low in supply and heavily in demand.