Real estate buyers in France are in a winning situation

According to FNAIM - French Real Estate Federation - in the first half of the year there was a drop in the prices of 3.6% compared with June 2012.

But as usual, this average is at odds with current trends. Prices fell by 3.8% in the regions and rose by 2.7% in Ile-de-France. Also prices in different cities vary a lot. Apartments in Bordeaux rose by 4.6%, while in Lyon prices fell by 3.9% and by 3.7% in Marseille and Montpellier.

Jean-Francois Buet, president of FNAIM, argues, that it could have been much worse. Many experts predicted the apocalypse for French market, but it did not happen. 

And on the other hand, buyers now have an unprecedented opportunity to take cheap mortgages. Decline in property prices coupled with low interest rates revived potential home buyers in France. Now you can take a loan for 20 years at 2.95% and for 15 years at 2.6%.

It seems that optimism is returning. To date, 58% of people believe that it is possible to invest in real estate. These results gave a survey conducted by FNAIM. In October 2012 this figure stood at 42%.

Buyers see that prices are falling, and that they can take cheap loans. They know that they are in a win-win situation.

French agents hope that these positive trends will lead to a recovery of the market, but so far we should wait for what the results will bring the second half of the year.

Depressed economic conditions, high taxes and unemployment continue to scare consumers en masse from making transcations.

Buying real estate is a long term investment that is very much based on trust. Today FNAIM predicts 635,000 real estate transactions in 2013. That is 72,000 less than a year earlier.

Good news is that French President Francois Hollande announced a new reform. The minimum holding period for a second home, after which taxes are exempted when you want to sell it, is going to be reduced from 30 years to 22 years.

The French Minister of the Budget, Bernard Cazeneuve, has decided to apply an exceptional reduction of 25 per cent on the CGT for the sales which will be finalised between 1st September 2013 and the 31st August 2014. This decision is part of the reform of the taxation of capital gain taxes on second homes in France.