Property Prices Falling in France

Europe may have lagged behind the US during the recent credit crisis, but they have caught up now and the effects are starting to be felt in the property markets. For the first time in many years, estate agents are closing their doors and the windows of the remaining agents are littered with hastily dropped prices. Property price movements  in France usually lag behind the UK movements and this downturn is no exception.

A quick stroll along the sea front of Golfe Juan, a small town on the Cote D’Azur, reveals a closed yacht brokerage, followed by a closed estate agent, followed by another agent with a window full of reduced prices, with another yacht brokerage closed in the harbor. Much of the driving force behind the boom years was from foreign investors. With the UK heading for what appears to be the worst recession since the 1930s, and Russian buyers struggling to make ends meet at home, this will have an inevitable effect on French property prices.

Estate Agents Closing in France

Urgent!! Negotiable!! €46,000 already taken off!

The genuine bargains have yet to surface, but if these indications are anything to go by, a considerable price correction is on the way. This one above has already been dropped in price by almost 20%. Fully a third of the properties for sale in this particular agent’s window have had the prices dropped recently. Another:

Property prices are falling on the Cote D'Azur

Hand Written Price adjustments as prices fall in France

The word for some time now is that what few properties are selling, are selling at between 20-25% less than advertised. This is only now starting to be reflected in advertised prices. Further inland, the story is the same, and a walk around smaller towns such as Draguignan tells a similar story, with hand written price adjustments in most agent’s windows. In fact, one major firm in the area has taken the unprecedented step of dropping their commission rate to only 4%. Some areas are being particularly hard hit, especially those that have traditionally relied on British buyers using over-inflated UK property as collateral for a second home purchase. The Dordogne for example has already seen the demise of a number of agents, with property puchases falling by as much as 50% in recent months.

The ultra-luxury end of the market still seems immune, with record prices being set for luxury real estate in France still. That aside, the rest of the market appears to be correcting along with much of the rest of the world and it is only a matter of time before the trophy property prices begin to tumble.