Core French property markets to perform best in 201328th January 2013
Recent figures from the FNAIM and Chamber of Notaries show that the best performing French property markets in 2012 we’re those primarily associated with tourism. Prices in Paris’ Ile de France region rose by 1.5% while average price per square in popular ski resorts such as Meribel and Morzine increased by 15.1% and 12.8% respectively.
“Tourism underpins France’s three core property markets; Paris, the south and the Alps, and with the country remaining the most visited in the world it is no surprise that these areas outperformed the rest,” said Nicholas Leach Partner at Athena Advisors. “With buying interest increasing due to the lowest ever mortgage rates this core market trend will continue in 2013. It’s worth noting that Paris’ seemingly low increase is due to the fact that the Ile de France region covers the entire Paris metropolitan area including the outer suburbs. Properties within the city’s man made Peripherique ring-road are highly sought after, especially rare new-builds.”
“Prime properties in the Alps have always experienced solid price growth but in 2013 we are likely to see a swing toward buy-to-let properties with personal usage,” added Leach. “Low deposits and low interest rates will make it easier for investor and lifestyle purchasers to purchase well located ski properties and this will give added buoyancy to the market. Leaseback properties under ‘Residence de Tourisme’ status, often the only ones to be granted planning permission in prime locations within resorts, should provide international investors with solid returns and good opportunities for capital growth.”
However, as investor interest turns towards rental properties in the Alps, Leach highlighted the need for caution when performing due diligence. “As appetite increases buyers should be sure the developer and management company are of sound credentials,” added Leach. “A guaranteed rental return is only as good as the management company offering it, so make sure your property is being run by the best in the resort.”