Tips: Buying Property in France in 2020
Looking to buy a villa on the French Riviera? Make sure you do your homework! Here is a guide to the things you’ll need to research before putting in an offer on a property in the south of France:
How to Find & Read the Listings
Listings normally say the number of m2 and pieces (rooms) that a property has. Each main room, not including the bathrooms, storage or kitchen, are considered a ‘piece’. So a 3-piece is usually a 2-bedroom. Watch out because some agents fluff this a little by calling a 2-bedroom with an extra large living room a 4-piece, so it’s important to double-check. A ‘salle de sejour’ or ‘salon’ is what Americans call a ‘living room’. Some estate agents list rooms as bedrooms even if they aren’t what you would consider a bedroom (no windows or super-low ceiling, too small, etc.), so make sure to count in person at the property.
Our Predictions for the Vacation Home Market in 2020
We spoke candidly with a number of top economists, investment advisors, and real-estate brokers and these were our findings:
In the really high-end market (€6 million+), the values will likely continue to increase, pulling the market averages upwards.
In the mid-upper end of the market (€3 million to €6 million), prices will likely dip only slightly due to the below factors. In this price range the owners tend not to need to AirBnb their villas, and have enough savings to weather the COVID-19 economic issues without needing to downsize.
The segment that will see the largest dip will likely be the more low and mid-range (€3 million and less) vacation home market. These owners are often elderly Baby Boomers and/or relying on AirBnb / tourism or other income that could be significantly disrupted.
Reasons prices will get cheaper starting in late 2020 and throughout 2021/2022:
- Influx of vacation homes coming to market because of Coronavirus: job and small business losses, lowered income, decrease in tourism overall and therefore decrease in AirBnb bookings. These factors will force many people to sell their vacation homes or downsize their primary residence.
- Baby Boomers are getting up there in age and are getting too old or sick to maintain villas, therefore selling their villas and moving into assisted living or cities. There are not enough Millennials to pick up the slack, based on the lack of population in this demographic, and cultural trends (Millennials tend to prefer the sharing economy: AirBnb versus owning).
- The long-term economic debt cycle is due for downswing, which will cause a major recession across Europe the near future.
- Brits and other foreigners buying in places with closer driving distance instead of South of France because of Brexit and COVID-19 (not wanting to fly on airplanes).
Often, when buying activity slows, it takes some time for homeowners and brokers to adjust their expectations and lower their pricing. In the meantime, realistically-priced properties may sell, but properties that do not adjust their pricing will remain on the market until they lower the price.
Tips: How to Find the Current True Property Value
“This is a good price. At this price, this villa will sell very quickly. You have to decide right away!”, real estate agents often say. However, it is not uncommon for the buyer to realize that this was just a high-pressure sales tactic and that the desired accommodation is still for sale months later. Similarly, a broker may tell a seller that they can sell their property for more than it’s actually worth just to secure the listing for their agency.
The easiest way to get an estimate of the true current pricing (and the recent sales prices) in a specific area of France is on these websites:
- This website shows trends of real estate prices per town or area over time, including the high and low price per m2. It also shows interesting information about the types of housing and who lives in them.
- This website shows you which areas are more or less expensive, and you can specify new or resale house or apartment, the property size, and the area or town in your search.
- This government website has an interactive map of France which allows you to click on the area of your choice to see the prices of past sales (this is the price deducted from transfer taxes, notary fees and real estate agency fees).
- Another government website, Immo Notaires, allows you to enter a specific address or click on a map to find past sales prices.
- You can also check online estimation sites like MeilleurAgents and Drimki.
Keep in mind that this doesn’t take into account the condition of the property, renovations needed, the view, or how eager the sellers are to sell it, all of which can affect pricing.
Auctions may (or may not) provide an opportunity for a bargain in France. Usually an auction is chosen to affect a quick sale – perhaps because of divorce, inheritance, or to settle debt. You can find out if there are any auction properties in the area you want by checking the Notaires website.
Properties at auction will typically have a much lower reserve than the market price and all wannabe bidders will need to pay a deposit in advance – which can be anything from 5-20% – if you don’t win the bid your money will be returned. Additional fees may include court expenses, lawyers’ fees, publication fees and more – it is important to check in advance what your obligations are. Here’s some more information about French property auctions.
Things to Find Out
Historical Images: Here are some simple ways to see past satellite images of the area so you can see how it’s changed over time (and if that trash on the adjacent property is actually just “temporary”).
Internet Access: Does the property have fiber (high-speed) internet? Here’s a map of internet speeds available (you can also search by address), and a map of the areas with fiber, and you can drill down the the exact property. You can check out the forecast of when it might get fiber internet. The government has a plan to make sure more areas get fiber access, but they keep pushing the deadline father and farther, so we don’t recommend you rely on that.
Keep in mind that all forms of Internet (including satellite, 4G, VDSL, ADSL, etc.) other than fiber have caps, meaning that even if they say “unlimited”, after you download a certain amount of content, the speeds get throttled down to a trickle. So if you’re planning on streaming lots of video (ie. you like to ‘Netflix and chill’), you’ll need fiber.
Mobile Coverage: It’s good to know what the mobile / cell tower situation is for the area you’re considering. Here’s a map of the mobile coverage across France.
Risk Zones: If the property you’re interested in happens to be located in high-risk zone then, in the event of a flood, earthquake, or fire that destroyed the property, there is no guarantee that you would be able to obtain planning consent to rebuild it. Being in one of these high-risk zones should lower the valuation of the property, increase the price you’ll pay for insurance, limit the number of banks willing to give you a mortgage, and commit you to paying for risk-prevention measures (like cutting down trees, clearing new growth and brush, etc. on your land) several times per year. Check with the local Mairie to find out what your obligations will entail.
Before buying a property, make sure to visit the nearest Mairie or Préfecture to ask about the local risk plan. Prospective buyers will normally be informed, as a report on natural or ‘technological’ risks form part of the statutory survey reports an owner is now required to produce as part of the sale process, but sometimes owners / agents try to scam buyers by giving them false or outdated reports, so it’s best to check for yourself. You can also consult the web site created by the French Ministry of Ecology which provides information on risk areas, although the information on the site is not always easy to interpret, and may not be entirely up-to-date. Here’s some more information about risk zones in France.
Survey Reports: There are a number of surveys that the seller is legally obligated to give you. They’re by no means exhaustive, and some surveyors are corrupt and will lie for the benefit of the agent or notaire, so it’s always good to get your own surveys done as well. Never take the broker’s recommendation for a notaire or survey company. Here is some information about surveys.
Cadastral Maps: This is the government’s official map showing the outline of the property boundaries and the shape of the buildings on it. You can search for them by address on this government website. If part of the villa you’re considering, or any of the outbuildings, isn’t shown on the cadastral map, that means it was built without proper permits / permission, and the local government could charge you with a hefty fine you and force you to rip that part of the villa down. If the seller didn’t get proper permission, make sure that they do before the sale, and verify it directly with the local Mairie (city hall) and/or Préfecture.
Pollution: Here’s how to find out if there are toxic pollutant zones to worry about nearby.
Housing Taxes: You can see the trend in housing taxes over time, and by area.
More Information: Here’s a great guide to help you learn more about buying property in France.
A Few More Things to Consider
The space between your villa and the neighbor: If you are thinking you’ll put up a tall line of trees or shrubs between you and the neighbor, you should know that the Civil Code states that there must be a minimum of 2 meters between the property boundary and a tree that is more than 2 meters tall. The minimum distance for all other plants is 50 cm. This rule only applies if no other rules or uses apply to the region or district. Your town hall will be able to provide details of local laws.
If the town is in debt: Check the historic debt of the area you are considering. This will give you an idea of if the people managing the area are overspending and you’ll eventually have to pick up the tab by way of increased property taxes.
Why are they selling? Find out as much as you can about the situation of the vendor. Ask: “How long has it been on the market” (watch out: many agents will tell you how long they have had it listed, but it could have been listed with several other agents before that…) and “Why are they selling?” (again, the answer may not be truthful… the seller is unlikely to admit that there’s a permit to surround the villa with camping, or that a high-rise will soon be built and block the view, or that there are major structural issues with the property.) It’s up to you to check who owns the nearby plots and what they can be used for.
Don’t just trust — verify: The notary and agents may not be looking out for your best interests, considering they only get paid if you complete the purchase for the property. Here’s more info about notaires and here’s how much you should expect to pay the notary. It’s up to you to hire independent experts (who get paid whether you buy the property or not) to double-check everything.
The official offer: Once you’ve visited the mairie to ask about the property and surrounding area, and you know as much as possible about the area and property, you can make an official an offer. A notary will help you with this. We’d advise you to offer 30% below asking, and start the negotiations there. Of course, all the prices you see advertised have one thing in common: so far, no-one has agreed to pay that price.
You’ll have 10 days (including holidays and weekends) during which you can do more digging and cancel without penalty. After the 10 days, you will lose your deposit if you back out. Since the cooling off period only applies to offers made by a person and not a company, if you want to own the house using a company, then you’ll need to make sure that your offer contract (which the notary will write for you) states that you can, at a later date, transfer the sale into a company name.
Nearly 30% of the properties on the French Riviera are second homes, and nearly 8% are unoccupied (many of those are used for vacation rentals). Only 62% are primary residences.