The real estate market in France has experienced recent declines in prices. The prices of houses in metropolitan France went down by 2.75 percent during 2015, which made this the 13th consecutive quarter that year-on-year price decreases took place. This figure was raised to 2.96 percent when adjusted to account for inflation. This price decrease even extended to Ile-de-France, which is the richest and most population dense region in the nation. The average apartment price in this area went down by 2.97 percent. The prices of apartments also dropped in Paris, the Petite Couronne, and the Grande Couronne by 3.08 percent, 2.54 percent, and 3.68 percent, respectively. However, the sales of the existing apartments in the city of Paris went up by 15 percent. They also went up by 21 percent, 26 percent, and 19 percent, in Ile-de-France, Petit Couronne, and Grande Couronne, respectively.

Overall, however, the Paris notaires deemed 2015 a good year in terms of real estate. The volumes of sales were more than 15 percent higher than those of the previous year. The trend is expected to continue in 2016. Already, the sales volumes have continued to increase and the interest rates have remained very low; they went from 2.5 percent to 2.4 percent in January 2016 alone.

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While it would help for real estate agents to get foreign buyers to invest in French properties, the foreign buyers are not showing interest in doing so. In 2015, non-resident foreign individuals only purchased 1 percent of properties in this country. This is just a little bit over one third of the corresponding percentage 10 years ago. A recent property market report from Les Notaires shows how sharply the figure has fallen. It was 2.8 percent in the 2006-2007 year, 1.4 percent in 2014, and 1 percent last year.

According to the Conseil général de l’environnement et du développement durable (CGEDD), the number of existing homes that were sold in the country of France rose by 1.4% in 2015 up to the month of August. This equated to 740,000 units that were sold during the year. The increase in Paris and the other aforementioned cities is very large compared to the increase elsewhere around the nation. The prices remained reasonable through the end of 2015 and went up by 0.4 in early 2016.

Additionally, construction of homes in France was the lowest in 2015 that it had been in over 15 years, and the situation had been exacerbated by a new rental law that puts an upper limit on what the rent amounts can be in expensive areas, which includes Paris. New housing starts (privately owned housing units) went down by 0.21 percent in 2015 up to August, with the number being 188,468 units. There were also only 245,004 total authorized dwellings, showing a decline of 4.24 percent.

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However, there was an advantage for the individuals who want to rent out their apartments in the city of Paris. They were likely to have very little or no trouble doing so. There was more demand than supply for these apartments. Rent amounts were relatively low, due to the fact that French rental contracts are typically long term, with restrictions placed on increases in rent amounts during the term of the contract.

It should be kept in mind, however, that the gross rental yields from these Parisian apartments were low; they were about 3.1 percent for large apartments and 3.6 percent for the smaller apartments. To be fair, this is not reflective of yields in locations all around France, as Paris is a high-end area, and other locations are not considered as desirable by buyers or renters. The average costs of apartments in these high-end areas are approximately €11,600 per square meter, or €1,085 per square foot. This year, a significant price difference has not been observed between larger and smaller apartments. The average rent per month paid by a tenant typically falls in the range of €30 to €36 per square meter, or €2.8 to €3.3 per square foot. Overall, smaller apartments are more expensive per unit of area. Residential property in the nation of France also comes with high round trip transaction costs.

As of early 2016, among the foreign buyers that are buying French properties, most come from the UK. In fact, 32.6 percent of the non-resident buyers in the country were British. They were most interested in houses in western and central France, where they made up 70 to 80 percent of non-resident buyers of homes. Italians represented 15.3 percent of the foreign buyers, and Belgium represented 11.1 percent. However, even though the British represented the largest proportion in this group, the percentage dropped significantly from what it had been 10 years earlier.

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Though the effects of Brexit have yet to be seen, it is anticipated that the French government is going to want to keep its foreign customer base. All of the British people (as well as other foreigners and locals as well) who are buying homes in France will likely not be affected significantly. The purchase costs, property taxes, and residency taxes are not expected to change. Brexit will not affect the ability to obtain a French mortgage. However, it is not yet known what will happen to the exchange rate.

Real estate agents in France would do well to tell foreign buyers and investors that they can get a good deal at this time. The house prices in parts of France are very low, and the value of the currency right now would get them good deals for their money. The prices of homes are the lowest that they have been since the year 2008, and they have not had an exchange rate this advantageous to buyers anytime in recent years. The average British buyer of French Alpine property spends about £290,000, which last year would have bought a house worth €342,000, but now it would buy an individual a house that is worth €390,000. Additionally, the mortgage rates in France are quite low, offering great bargains for foreign buyers. The French government wants the markets to be more open than they are and for more movement to be taking place across the economies of these nations. As such, it would largely benefit the realm of real estate in France, as well as the economy of the entire nation, if more foreign buyers were to do business in French real estate.

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