Where is the French property market heading?

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Le roi de Prusse
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Where is the French property market heading?

Post by Le roi de Prusse »

More specifically, where is the market in old, stone houses typically loved by the British yet disdained by the French going? Some online estate agents are talking up the pre-Brexit ‘rush’, suggesting there has never been a better time to sell as Brits flock to France to buy a home and establish residency. Others are suggesting that prices are continuing to rise as, even if there is a ‘no deal’ Brexit, France will remain a great place to have a holiday home, visa or no visa requirements.

On the other hand, why would anyone from the UK buy a house in France at a time of such uncertainty? Surely, you’d wait until after the EU summit in October? Who knows how we’re going to be treated next April; or in 2021 if a deal is done and the transition period remains? Surely fewer people are seriously contemplating buying in France just now and that must be having a depressing effect on prices? One online estate agent is currently advertising 5,390 French properties as “reduced” which suggests the market is hardly booming?

As someone with ‘skin in the game’ this keeps me awake at night; how about you?

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Post by Moliere »

There is anecdotal evidence of an influx of British buyers in popular areas over the last year or so, but the total is still lower than in pre-referendum years. Perhaps they want to buy their properties whilst it's still relatively easy and deal with the Brexit effects as and when they happen.
Interestingly, round here a few Brits have sold up and returned to the UK, and their properties have been snapped up by Swedes. I hear that in Sweden there is some sort of tax-break for owners of foreign properties, though I can't figure out why.
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Post by Pixietoadstool »

I believe the immobiliers are talking it up and even if there are Brits wanting to buy they are likely to have to pay 20% more as the value of the £ has been demolished by the B word since 23rd June 2016. However, I have noticed a slight upward trend in the price of property here where I live in the Cévennes since 2012 - it went down but recently has gone up again but I don’t know why. Here in the Gard I think a lot of people are attracted to the style of older properties (except those in towns and villages which are extremely cheap for what you get).
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Post by Mouse »

At the point of selling our place I've had many conversations about the market but we're in Spain....and more specifically Ibiza which is different again compared to the rest of Spain.

Talking to the agents who deal mainly with Brits....the word on the Street is that they're concerned about both brexit and the fx rate of the pound. The brit market is very quiet. In fact the summer has been dead.
Having said that prices here are expensive, very - compared to the French market....and most of Spain is starting to licence properties that are to be rented to holidaymakers. That is closing down a way of making property 'pay it's way'.

I think the focus has to be on selling to other Europeans. The Brits are right to hold back at the mo.

Mousie (sorry for imposing on a french thread)
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Post by CSE »

Not forming another post for your blog are you?
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Post by Ecosse »

casasantoestevo wrote:Not forming another post for your blog are you?
My thoughts exactly: sorry to sound cynical, but we're on this forum to give genuine advice to each other, not to provide fodder for bloggers.

It appears from your posts/blog that you're very early on in the process and perhaps are thinking that by drumming up support for your blog, this will convert into a lucrative rental business.

However, and I mean the following in the nicest possible way, before you look at properties, linen or other items to fill up the removal van with, I think you have to ask yourself some very basic questions:

1) Are you planning to run a hobby b&b or do you need to at least break even to be able to stay in France? If so, you need to a) choose your location very carefully (less than 2 peak seasons and you'll likely struggle: to give you a clue, our running costs, before we can claim any profit, are 3.5k a month) and b) you need a minimum of 5 rooms.

2) Considering you need a minimum of 5 rooms (yes, for the majority of the time many of those rooms will lie empty, but to break even, you need them during August and February when the whole of France is on holiday), bear in mind that you can't, under Chambre d'hotes legislation, have more than 5... and in our experience, 5 rooms is the absolute minimum needed to break even.

3) Considering the 5 room limit, you need to find a way of renting more rooms. As far as I can see, if you don't want to go down the line of renting rooms illegally, there's only one way to do this: be in an area where you can rent out your whole establishment on a self catering basis to ski families for a premium during the winter.

4) Now, the crux: If you've found that magic place in the great location, next to a restaurant (it's not worth offering table d'hotes) where you can legally rent out more than 5 rooms and also makes a profit, how happy are you cleaning at least 3 toilets a day, 100 days in a row, with no day off and no chance of ever going out for a relaxing meal with friends because you have to be back that the chambre d'hotes for the 2 couples who didn't give you their time of arrival and might leave a bad review if you're not there?

This is the reality: toilets, toilets and more icky toilets. Long hours (6am until midnight in August), guilt at always turning friends' invitations down, cold dinners because the guests invariably arrive just as you've served up (do they have a secret camera?) and, with the modern way of booking, the ever present threat of a bad review if you get it wrong.

Furthermore, if you think the solution is to just up the price or have a minimum stay of, say, 5 days is the way to get around this, think again. Chambre d'hotes don't attract people for longer than a max of 4 nights: beyond that and a weekly rental is cheaper.

I'm sorry if this sounds less than encouraging, but having just spent 100 days staring down the same 5 toilets (6 in winter), I know that you have to be very willing (I won't say happy) to clean the same toilets day in day out. You have to be willing to sacrifice those meals out, lie-ins together, day trips and meet-ups with friends. You have to be content with doing all the work yourselves, as well as, once the doors are closed after the season, jumping straight back up to do the repairs/renovations, sort the accounts and replace the stained towels in time for the next season and you have to be content to know that there's no point in paying someone to come in to do the more boring jobs (like cleaning the toilets) because in doing so, you are pretty much guaranteed to run at a loss.

I know from experience that it's a hard, restrictive life. I also know that I would be very bitter if we didn't make an albeit small profit (by being in France's 4th largest ski area and literally on the slopes of Mont Blanc, we are fortunate to be in posession of that magic formula), or if we didn't have children who benefit from the hefty French taxation system that gives so much back to families with school age children.

So before anything else, these are the questions you should be asking yourself, along with the more obvious ones such as, are you happy to share your house this strangers and smile at them all... even the misrable, demanding ones who you wouldn't usually give the time of day to. If you baulk at any of them, I would have a serious rethink. Many people, including more than one friend, have ended up very unhappy running a chambre d'hotes and I would hate for anyone to end up like they have.

On a more positive note, France may still be for you - it is a fabulous country - but you may find that you'd be happier, and better off, just living here without running a chambre d'hotes.

Oh, and just a footnote: I offer this as advice. I do not permit any part of it to be used for your blog.
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Advice

Post by Le roi de Prusse »

Thanks Ecosse, some very useful questions. As you suggest, we are very early on in the process so a dose of reality is always welcome. We're doing as much research as possible as well as reading as many personal accounts and talking to friends and acquaintances that have bought property in France. This forum is a very useful sources of information and opinion and I'm very grateful for any input.

As I have learned, from posts on here and other forums as well as our research, setting up and running a B&B in France is not without risk. As we won't be in a position to move for at least a couple of years we have the opportunity to plan thoroughly and work on cash-flow forecasts, modelling various scenarios to calculate what we'd need to bring in to meet our outgoings. Hopefully that will mean that when it comes to looking for a suitable property we'll know what we're looking for.

We're certainly not afraid of cleaning toilets, or any of the other sacrifices we know we'll need to make in order to make a success of our move to France. I've worked in B&Bs before and studied hotel and catering management so I am aware of the pitfalls and the challenges that customers sometimes present. We aren't moving to France to avoid work, rather we want to be able to work for ourselves somewhere sunnier than here.

With regard to my blog, you are right in that I hope to build some interest in our plans so that we aren't starting cold in a couple of year's time. However that wasn't the purpose of my original post and I don't intend to write something about the French property market as a result. I will make it clear in future if I start a thread with the intention of writing about it but it seems a shame not to be able to share useful insights with people who don't read this forum.

I have written one blog post based on answers to forum posts; about what to buy before you set off. Even then I didn't set out with the intention of writing about it; it just seemed a shame to not to share them. Having said that I have had some positive feedback to the blog from people on here and other forums and have just had a snippet posted in French Property News magazine with a link to it.

We're visiting France in January which will give us the chance to visit our preferred region out of season; a useful tip I've picked up from here and other places.
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Post by Jensen »

Ecosse wrote:
casasantoestevo wrote:Not forming another post for your blog are you?
My thoughts exactly: sorry to sound cynical, but we're on this forum to give genuine advice to each other, not to provide fodder for bloggers.

It appears from your posts/blog that you're very early on in the process and perhaps are thinking that by drumming up support for your blog, this will convert into a lucrative rental business.

However, and I mean the following in the nicest possible way, before you look at properties, linen or other items to fill up the removal van with, I think you have to ask yourself some very basic questions:

1) Are you planning to run a hobby b&b or do you need to at least break even to be able to stay in France? If so, you need to a) choose your location very carefully (less than 2 peak seasons and you'll likely struggle: to give you a clue, our running costs, before we can claim any profit, are 3.5k a month) and b) you need a minimum of 5 rooms.

2) Considering you need a minimum of 5 rooms (yes, for the majority of the time many of those rooms will lie empty, but to break even, you need them during August and February when the whole of France is on holiday), bear in mind that you can't, under Chambre d'hotes legislation, have more than 5... and in our experience, 5 rooms is the absolute minimum needed to break even.

3) Considering the 5 room limit, you need to find a way of renting more rooms. As far as I can see, if you don't want to go down the line of renting rooms illegally, there's only one way to do this: be in an area where you can rent out your whole establishment on a self catering basis to ski families for a premium during the winter.

4) Now, the crux: If you've found that magic place in the great location, next to a restaurant (it's not worth offering table d'hotes) where you can legally rent out more than 5 rooms and also makes a profit, how happy are you cleaning at least 3 toilets a day, 100 days in a row, with no day off and no chance of ever going out for a relaxing meal with friends because you have to be back that the chambre d'hotes for the 2 couples who didn't give you their time of arrival and might leave a bad review if you're not there?

This is the reality: toilets, toilets and more icky toilets. Long hours (6am until midnight in August), guilt at always turning friends' invitations down, cold dinners because the guests invariably arrive just as you've served up (do they have a secret camera?) and, with the modern way of booking, the ever present threat of a bad review if you get it wrong.

Furthermore, if you think the solution is to just up the price or have a minimum stay of, say, 5 days is the way to get around this, think again. Chambre d'hotes don't attract people for longer than a max of 4 nights: beyond that and a weekly rental is cheaper.

I'm sorry if this sounds less than encouraging, but having just spent 100 days staring down the same 5 toilets (6 in winter), I know that you have to be very willing (I won't say happy) to clean the same toilets day in day out. You have to be willing to sacrifice those meals out, lie-ins together, day trips and meet-ups with friends. You have to be content with doing all the work yourselves, as well as, once the doors are closed after the season, jumping straight back up to do the repairs/renovations, sort the accounts and replace the stained towels in time for the next season and you have to be content to know that there's no point in paying someone to come in to do the more boring jobs (like cleaning the toilets) because in doing so, you are pretty much guaranteed to run at a loss.

I know from experience that it's a hard, restrictive life. I also know that I would be very bitter if we didn't make an albeit small profit (by being in France's 4th largest ski area and literally on the slopes of Mont Blanc, we are fortunate to be in posession of that magic formula), or if we didn't have children who benefit from the hefty French taxation system that gives so much back to families with school age children.

So before anything else, these are the questions you should be asking yourself, along with the more obvious ones such as, are you happy to share your house this strangers and smile at them all... even the misrable, demanding ones who you wouldn't usually give the time of day to. If you baulk at any of them, I would have a serious rethink. Many people, including more than one friend, have ended up very unhappy running a chambre d'hotes and I would hate for anyone to end up like they have.

On a more positive note, France may still be for you - it is a fabulous country - but you may find that you'd be happier, and better off, just living here without running a chambre d'hotes.

Oh, and just a footnote: I offer this as advice. I do not permit any part of it to be used for your blog.
Well said ! And I actualy think that you have toned the hard reality of it down !! (we had 2 broken/smashed toilet seats this year, again ! )

But from experience anybody wishing to venture into the French Gite/ B&B market just won't be put off !!!
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Post by GillianF »

Sadly, I think people think that gites, self-catering is going to be easy money and a way to make money from a property.

Disillusionment awaits!
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Post by Mouse »

I've always been in awe of whoever runs a bnb. The work involved and the compromises made to your day to day lives is something I would definately struggle with. We're so happy to say goodbye to guests at the end of a 16wk season, that I don't think I'd have the stamina to do more than that.

We've had a few people view our villa (which as many of you know we've just put up for sale) and as we have a tourist licence most have been looking to bring an income that way. It has been very difficult to hold my tongue when I hear them talking about it......they just have no idea. So far 2 wanted to live in it and then go off for July and August and rent it out. They talked of wanting to 'update/furnish/modernise it.
We've always gone down the 'guest proof' route. Yes we'd have loved to have put a high end kitchen in, or white sofas but the reality is that when those owners come back from their high summer trip they will be shocked and in tears at the condition/stains/damage that has occurred.

People want to live the dream....when really they need to get in touch with reality, then build that dream around that.

Mousie (going back to post season fixing, painting and destaining)
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Post by Le roi de Prusse »

Jensen wrote:
Well said ! And I actualy think that you have toned the hard reality of it down !! (we had 2 broken/smashed toilet seats this year, again ! )

But from experience anybody wishing to venture into the French Gite/ B&B market just won't be put off !!!
Assuming you provide holiday accommodation yourself, would you have been put off by people telling you how hard it is when you were in our position?
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Post by CSE »

It has been very difficult to hold my tongue when I hear them talking about it......they just have no idea
It is either too much of "A Place in the Sun " syndrome or AirBnB pushing it's ideas.
Those that choose to completely rebuild rather than purchase off the peg are IMHO even greater dreamers. Several blogs based in Galicia, about the rebuilding of properties for businesses are now running into 10s of years. Still no income.
Good luck with the sale Mouse.
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Post by Le roi de Prusse »

GillianF wrote:Sadly, I think people think that gites, self-catering is going to be easy money and a way to make money from a property.

Disillusionment awaits!
Anyone who has done any research will find plenty of people who will tell them how hard it is. However, that doesn't necessarily mean they, or we, shouldn't do it!
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Re: Where is the French property market heading?

Post by oasiscouple »

Le roi de Prusse wrote:More specifically, where is the market in old, stone houses typically loved by the British yet disdained by the French going? Some online estate agents are talking up the pre-Brexit ‘rush’, suggesting there has never been a better time to sell as Brits flock to France to buy a home and establish residency. Others are suggesting that prices are continuing to rise as, even if there is a ‘no deal’ Brexit, France will remain a great place to have a holiday home, visa or no visa requirements.
I thought the topic here was property prices in France, so on that basis I will add my bit. In our area (limit Gironde, Dordogne and Lot et Garonne) values of our type of property have been static, even a bit down, since 2002. This is when I purchased my three bedroom stone built house with 10m x 5m swimming pool, no near neighbours and with vineyards and woods on all sides. I purchased the property to run as a summer holiday home. This worked very successfully with average 16 weeks booked every year. Following my divorce, I moved into the house but continued the holiday lettings in the summer moving temporarily elsewhere.

Since I purchased the house, I have had the house reroofed, taking advantage to add very efficient roof insulation, changed all external doors and windows to double glazed units, added a garage which the house didn’t have and many other improvements.

I want to sell and buy something else near the Mediterranean coast where we already have a holiday beach apartment. Two estate agents have valued the house for sale at less than I paid in 2002 despite all the improvements. Both said the market for this type of property is very depressed at the moment, hence the low valuation.

Think I need to wait a bit, but how long?
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Re: Where is the French property market heading?

Post by Moliere »

oasiscouple wrote: Think I need to wait a bit, but how long?
I suspect the problem is that it's only the Brits who like those old stone properties. The French want modern, with lots of electric gizmos, that's why those old stone properties were once so cheap, nobody else wanted them.
I stayed this summer in a beautiful mid-19th century chateau, Madame the owner confided that she never let to French people, only British, Germans and Scandinavians; the French she said looked in horror at the exquisite old decor and refused to stay in a place which didn't have all the modern conveniences.

So until the Brits come back in force, I guess prices are going to stay moribund.

Mols
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