Low euro and mortgage market give boost to French ski property13th January 2015
The combination of the Pound and US dollar reaching at seven and nine-year highs respectively on the Euro and French mortgage rates at all-time lows is providing a big boost to the French ski property market, reports Athena Advisors.
Following a speech made by Mario Draghi, European Central Bank President, the pound rallied to a seven year high against the Euro, reaching 1.291 on Friday 2nd Jane, its highest level since October 2008, the month that marked the end of Lehman Brothers. Draghi’s comments on potential quantitative easing also pushed the Euro lower against the dollar, seeing it fall by 1.2% to $1.186, marking its weakest level since March 2006.
“Clients at all levels have been capitalising on the market opportunities, but the most activity is at the top end," commented Nicholas Leach, Partner at Athena Advisors. "Cheap lending and value in the Euro is proving too tempting for HNW buyers, especially those who have been sitting on the fence for a few years. Nationalities are mixed, but British and Middle-Eastern based buyers are predominant, which correlates to the strengthening pound and dollar.”
Compared to summer 2011 the sterling price of a €1.0m property has dropped by £115,000 (12.8%) from £900,000 to £785,000. In dollars, at €1.0m property over the same time period now costs $1,193,000, down from $1,450,000, a drop of some $257,000 (17.72%).
Ski property viewings up 42%
“We have property viewings booked in every day for the next 4 weeks, mostly from those who are in the Alps on vacation,” adds Leach. “Overall, ski property viewings are up 42% on last season with the big resorts of Val d’Isere, Courchevel, Megève and Les Menuires.
“The little-known resort of Chatel is also getting a lot of interest. Its relatively low price per square metre is primed for real growth because of the new lift linking the Super-Chatel and Linga ski areas.”
Mortgage rates drop below 3.0% for first time
John Busby at French Private Finance comments:
“Whilst sub 3.0% rates boosted the French mortgage market over Christmas, the beginning of 2015 may herald even lower rates in France as the long-term outlook for growth in Europe remains weak.”
“The TEC 10 index dropped below 1% for the first time ever in December, hitting 0.86%,” added Busby. “It is worth stressing again that this is now the rate investors will receive when lending to the French Government for a 10-year period. Hopefully this drop will continue to make it through to retail mortgage rates and so buyers will continue to benefit.”