Vive la différence en France

Sunday Business Post - Property Expo 08 Supplement - Feb 10 2008

France's Atlantic coast is proving as big a draw as many of the traditionally popular areas, writes Dermot Corrigan.

The Vendée region, on the Atlantic coast of France, offers value to Irish investors and holiday home buyers, according to Olivier Florence, managing director of The French Property Experts.

Florence said the region was attracting interest from Irish buyers, as it offered lower prices than traditionally popular locations such as Languedoc and the Mediterranean south-east.

"The Atlantic coast, in particular the Vendée region, is becoming popular,” said Florence. “The prices in the south have gone up quite a bit in recent years. You can still get pretty good prices all along the Atlantic coast. The weather there is very good as well, it is very sunny and you have the sea, so people are starting to discover that it is a good region to buy in."

Trisha Mason, managing director of VEF, agreed that Irish buyers were starting to focus more on the Vendée.

“Vendée is now showing an increase in interest and we have booked several clients into this area already this year,” said Mason.


Investment Potential

Mason said regions off the beaten track were offering good value to Irish investors and buyers.


“Generally, the best investment potential is where it is not easy to get to at the moment," she said. "Limousin is showing a growth in interest, and I think that will be followed by Auvergne. The advantage of Auvergne is year round rental with the ski season in winter and outdoor activities all year. Prices remain amongst the cheapest in the whole of France.”

Irish buyers are also increasingly drawn to Brittany and Normandy, according to Florence. Both Mason and Florence said the traditional areas still remained popular with Irish investors, however.

"The Languedoc is the most popular," said Florence. " That is in the south-west of France. The south east is popular as well, but that is more expensive, so you need a fairly good budget to be able to buy there."


Buyer trends

Mason said holiday home-buyers, who would previously have bought only in Spain or Portugal, were now looking at France as a viable alternative.


“During the last 18 months, we have seen more and more holiday home buyers enter the market," she said. "This has been as a direct result of the increase in direct flights from Dublin and other airports in Ireland to various parts of France. We are also seeing a move to France of Irish people who originally bought in Spain but are now looking for the traditional lifestyle with a stable property market."


Florence said that the majority of buyers were looking for properties that could be rented out and used as holiday homes.


"Nine out of ten would want to use it themselves," he said. "Most people want to have a rental income, and to be able to use it themselves as well. They have been in France on holidays, and they fell in love with the place. They love the food, the markets, the countryside.”


“It is normally people's first foreign property purchase, but we do get a few investors who have property here and there,” said Florence. “A lot of people are also thinking of their retirement, and they prepare by buying a property."


Price range

Mason said the average price paid for a French property in 2007 was €230,000.


“This has doubled in six years,” she said. “It is still possible to buy a three bedroomed property in the Auvergne for €130,000. Capital growth for the area is not expected to be above average by the French.


"However, I believe that the increase in overseas buyers will see above average capital growth in 2009 onwards. The overseas buyer has huge influence on property values in an area, but is often ignored by the French in making their predictions of capital growth.”


Florence said the price of a typical three-bedroom holiday-home property varied considerably with its location.


"On the Atlantic coast you are probably looking at €160,000, and in the south-west it would be about €220,000 and maybe about €280,00 in the south-east," he said.


France is an established market, not given to violent fluctuations in price or demand, according to Florence.


"Prices have appreciated a little more in the south over recent years, but it has started to slow down a bit as prices have gone up to quite a high level," he said. " The property market has firmed up a little bit this year, but there is no big changes.”


Practicalities

Mason advised anyone considering buying a property in France to seek professional advice.


“French law differs from Irish law," she said. "It is not difficult for Irish buyers to become property owners in France, but they need to take good independent professional advice before setting out to do so.”


Mason said properties in France were usually advertised with the fees included in the price.


“All property for sale in France through French agents is advertised with the purchase price of the property and the French agent’s fees. These are usually six to eight per cent," she said.


Florence said French banks welcomed business from Irish customers, and most purchasers opted to take out mortgages in France.


"People raise the finance mostly in France because the interest rates are lower," he said. "Also the security on the property is in France. If they want to borrow in Ireland, they may have to do an equity release in their own home. Then if they are unable to repay it is their own home that is in danger."


Irish buyers can be liable for local taxes, whether or not they rent the properties, Florence said.


"Local taxes are not based on the rent, not the property price,” he said. “For local tax we usually say to budget for one month's rent per year. Once people look at the property they can tell roughly how much it is going to cost them."


It has never been easier for Irish people to visit France. Airlines with regular flights linking Ireland with most corners of France include Aer Lingus, Aer Arann and Ryanair, with flights departing from Dublin, Shannon, Cork, Galway and Waterford.


Popular destinations, such as Paris, Carcassonne (in Languedoc), Toulouse, Bordeaux, Marseilles, Paris, Nice, Lyon are served year-round. Flights to other destinations, including Rodez, Brest, Nantes, Biarritz, Lorient, La Rochelle and Tours are seasonal, with the service commencing in early Spring and ending in Autumn.


The cost of the flights is dependent on the time of year and the airline’s pricing policies, however low cost flights (from approx €50 each way per person) are generally available if people book well in advance.