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French luxury property was rather subdued in 2014. However, the € exchange rate and the current low prices environment, may entice international investors to invest in French luxury properties this year.
According to Barnes luxury estate agent network, Paris property market remained relatively active in 2014, while prices for luxury properties in the French countryside have dropped by 30% to 50% compared to 2007.
” The market remains relatively active but with prices 40 % cheaper than in 2007 “, commented Thibault de Saint-Vincent, president of Barnes. In Périgord, for example, it is possible to acquire a house in perfect condition of 250 m ² with a 2.64 hectare of land and a swimming pool for 660 000 euros, that is 2500 euros m ². ” In 2010, this property would have been sold 15 % higher”, added the president of Barnes. Beautiful XVIII century castles can be acquired for less than a million in Sologne and Limousin, you may even negotiate a few of them down to half a million.
Prime luxury markets where the very affluents French accounted for a majority of the buyers have experienced a significant price reduction of 40% over the past few years. They are now in recovery with higher number of transactions, as in Biarrritz, Deauville, Le Pyla, Megève, Ile de Ré and Corsica. However, the higher end luxury market for international “clientele” (Courchevel, Cannes and Saint Tropez) remains stagnant.
In Paris, the upper end luxury products (i.e.: property of at least 200 m2 and above 2 millions €) have dropped by 25% since December 2011, while prime properties below this threshold decreased by 5-10% over the past 2 years.
The recent slowdown in Paris and a favourable € exchange rate, may attract international investors in 2015. In 2009, Paris was 20% cheaper than London and 10% more expensive than New York. Today, Paris property prices stand at 8000 €/m2, 70% below New-York (Manhattan) at € 13 300 m2, while London (central) is 2.7 times more expensive at € 21 500 m2.
Please read our previous articles on the French property market in 2014 and possible trend in 2015:
If you decide to buy a land in France to build your own property, you might also be interested in a recent positive tax change: “French Finance law opens opportunities to buy building land in France”
You might also be interested in a recent tax change which significantly reduces capital gains tax on French property for residents outside of the European Union: