Sales of French prime property has been strengthening since 2015 and could top a million for the first time by the end of 2019.
However, British overseas property investors seem to be abandoning French prime property, as Brexit influences buying decisions.
British buyers now account for just one in five French prime property purchasers, down from three in five in 2014. Belgian, Scandinavian and Middle Eastern buyers as well as the French themselves have filled this gap in the French prime property sector.
Overall, German, Scandinavian and Belgian buyers are active, helping offset a decline in British purchasers whose buying power has been hindered by the weak pound and Middle Eastern buyers are active in the South of France whilst Paris has seen a rise in buyers from the US and South East Asia.
The Prime France 2019 report from international real estate firm Knight Frank also says that Paris prime property prices will be further boosted by the Grand Paris Project, Europe’s largest infrastructure over the next decade and by the 2024 Summer Olympics.
The report also points out that new homes in France are becoming popular with overseas property investors, as they come with added appeal provided buyers adhere to certain stipulations. TVA (VAT) of 20 per cent is refundable on newly built or off plan properties while transfer tax is limited to 2 per cent instead of the usual 7 per cent for resale properties.
It also points out that France remains the most visited country in the world with over 89 million arrivals in 2018, providing a reliable pool of rental demand for second homeowners. Indeed, around 70 per cent of Knight Frank’s second home buyers in France aim to rent their property, a marked shift from a decade ago.
The data also shows that enquiries for French homes increased by 33 per cent and sales by 63 per cent in 2018 year on year, based on Knight Frank data. This momentum and positivity has continued in 2019, with a number of record prices set for French prime property in Paris and on the French Riviera in the first half of the year.