Property Trends 2012

Photo: guy harrop / Alamy  

French banks, following in the footsteps of American mortgage lenders, are making it harder for home buyers to get a loan. Expat borrowers and French residents alike are being told "non" unless they have very large deposits and lofty incomes. BNP Paribas, one of France's biggest lenders to expatriates, overhauled its mortgage range for non-residents and has cut loan-to-value ratios from 80% to 70%.  They've also chopped the terms on interest-only loans -- but then these loans have always struck me as a perfectly terrible way to borrow money.  French banks are being cautious and rejecting borrowers with loan debt exceeding six times their income.  This seems reasonable to me, but it could affect people with several buy-to-rent properties or even some first-time buyers.  But then again, perhaps someone so heavily leveraged should rent for awhile before taking on more debt.  Call me old fashioned.

Despite the tightened lending, borrowers with sufficient income and smaller debt can still get a loan and French mortgage rates continue to look attractive.  French residents, more conservative borrowers than Americans, tend to like long, fixed-term rates and the interest rate on a 25-year-term is now set at around 4.4%.  There's also something called a capped rate deal where borrowers are promised they will not pay more than 4.5% for the term of the loan and the current rate for these is just 3.5%.

Meanwhile, FrenchEntrée just published their annual property survey based on feedback from their network of immobiliers (real estate agents) and property finders across France.  A few interesting items jumped out at me from this year's report, which showed real estate sales pretty grim in some parts of country but lively in others:

• There seemed to be fewer buyers from the UK last year, except in the Alps and Cotes d'Azur, but this was made up for by French, Dutch and Belgian buyers.  Increased interest from Australian and American buyers also showed an uptick. 
• Paris had a stunning year with a 22% increase in property values in the first half of 2011, although that pace slowed significantly as the year progressed. The number of transactions was down, but only because there weren't any properties to sell.  The 3rd and 4th arrondissements were hot.  
• The Languedoc saw more American buyers, as well as people from Sweden, Norway, Denmark and, of course, French seeking homes. The region already has an enormous British community.  A lot of people are taking a look at the Languedoc, which borders Spain, because of the anticipated completion of the TGV link to Barcelona at the end of this year.  Travelers will be able to get from Perpignan to Barcelona in less than an hour. Tapas for lunch! 

With all the gloomy economic news out of Europe, this all looks rather encouraging.

Useful Addresses

I spent three months searching the Web for properties, using both English and French versions of the sites created by various immobilier (real estate agents). Since there's no such thing in France as an "exclusive listing," in theory nearly all realtors should have the same properties. But they don't. You see a lot of overlap, but you also find unique properties on each site so it is definitely worth searching through various immobilier and forum.

I looked at Provence and the Languedoc Roussillon as a grid and searched area by area between Apt in Provence and Beziers in Languedoc Rousillon. I developed a standard list of key words and searched them in each area or town. You'll need to make your own list, but my search terms included Houses for Sale, Maison a Vendre, Immobilier (with name of city), Real Etate Agent (with name of city), French real estate and Maison de Village (name of city).

It is the subject of some debate whether you get a better deal buying directly from a homeowner or through an agent. If you work through an agent, between the agent fees and the fees charged by the Notaire -- the government officials who preside over property sales -- you pay an average of 8-12 percent more for older properties. (There are special breaks on taxes and fees for properties less than five years old.) You have to pay the notaire no matter what, so with the 3-5 percent agent fees, buying from an individual has real appeal. On the other hand, people selling their own homes often overvalue their properties and can be difficult in negotiations since they have more emotional investment. A good agent can answer questions and save you a lot of wear and tear. But don't forget, they represent the seller, not you, so question absolutely everything you're told and verify everything.

Beside the immobilier sites, I also quickly found other sites that were of great use, including online expatriate forum, online classified and portals, and some newspaper sites. There were sites that contained a huge amount of information on every topic related to buying a home and moving to France and there were even a number of independent Web sites set up by tech-savvy sellers for their own homes.

Here are a few Web addresses that I found useful and may provide a good place to start:

L'Immobilier en Provence CTI, the Website of the realtor who sold me my home, Vincent Dumond
Maison de Provence Immobilier Luberon
Immo30 for the area around Uzes/St. Quentin la Poterie. Agent Eric Bardel is fabulous.
ImmoFrance.com
French-Property.com which contains a great deal of relevant information and a forum
FrenchEntree.com, a portal to real estate listings, great general background and an e-newsletter
Franglo.com, a network of Websites, classifieds (including houses for sale and rent) and a forum for English speakers
Americans in France, a portal to all kinds of information, as well as classified ads
Creme de Languedoc, another portal and great resource with excellent listings by both individuals and agents