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French prices on the up

Monday, November 02, 2009

Source: Catherine Deshayes

Figures from the FNAIM revealed that although French residential prices fell overall by -1per cent in the third quarter, they rose in September and are now +2.8per cent higher than they were six months ago...

Overall, during the last 12 months, prices in the French market have decreased by a total of -7.8per cent and there is much optimism that the upward movement in September will be the start of a trend in which the market recovers in 2010.

A healthy lending environment is also expected to aid the property recovery. While mortgage finance in the UK remains difficult to obtain, the French banks continue to lend to borrowers with smaller deposits, even up to 100per cent loan-to-value (LTV), according to Athena Mortgages.

Athena Mortgages has reported that there has been a +21per cent rise in Q3 2009 compared to the second quarter in the French property market from UK-based investors. Mortgage completions in the third quarter were also up +14per cent over the previous three-month period.

In the Normandy town of Alençon, for example, gross yields are 7.5per cent, while in the medieval town of Poitiers, western France, they are currently 7per cent. According to Athena, other towns with good prospects are Clermont Ferrand in central France at 6.8per cent and Tours in the Loire at 6.4per cent.

In some areas prices are significantly lower with popular destinations such as Biarritz in the south west and Cannes, Perpignan and Nice in the south of France all with properties that are -10per cent cheaper than a year ago.

Source: www.property-investor-news.com