British expats are likely to see the value of their homes in France fall by up to 2% this year, according to estate agents.
FNAIM, the national trade body, predicts the drop after a modest 0.8% increase in 2012.
As in most countries, the average figures hide a wide range of regional price differences, with homeowners around Paris seeing much larger increases than those in the provinces.
Ile de France, the central region around the capital, saw home values go up 1.5% but houses dropped 0.1% in value, while flat prices rose 2.6%.
The popular expat destinations of Normandy and Brittany saw some of the worst price drops.
Price highs and lows
In Brittany, house prices collapsed 6.4% and apartment values by 2.95%.
In Lower Normandy, house prices plunged 5.3% and apartments by 6.5%, while in Upper Normandy, apartment values plummeted 6.5% as house prices climbed 1.5%.
Home values were up in Champagne-Ardennes with houses rising 0.6% and flats 0.9%, while apartment prices increased 2.6% but house prices tumbled by 5.6% in Poitou-Charentes.
Prices were down on The French Riviera, Picardie, Lorraine, Alsace, Centre, Nord Pas de Calais, Pays de la Loire and the Midi Pyrenees.
FNAIM and official government agencies are still computing house sales for 2012, but initial estimates put the number down by around a fifth following the election of Francois Hollande as president.
His socialist government has introduced several wealth and property taxes that have impacted the housing market strongly.
Realistic pricing
To put the French housing market in perspective, a 0.8% change over 2012 is no real change compared to around 15% price falls in Spain and Portugal, while Cyprus house prices are in free-fall after a number of fraud scandals.
Estate agents serving British expats say the miserable winter and current cold spells are encouraging buyers to look to France – pushing up the number of viewings by a third on the same period last year.
One way the indifferent market has helped is by urging sellers to ask for more realistic prices if they want to shift their homes reasonably quickly.
Many owners, say agents, consider their homes are worth much more than buyers believe, and because supply is less than demand, only well-priced homes are selling.
FNAIM suggests the best deals are likely to be the more expensive properties – costing 600,000 euros or more as sellers will have to price more sharply to attract buyers.
It depends on what you mean by “French property”? If you mean the sort of ordinary houses (in an estate, or in the suburbs) then prices are holding up reasonably as people still continue to move house in reaction to a change of job or family reason.
On the other hand those properties we can call “Lifestyle-change properties” are in free-fall. Not just the Brits but also a lot of French (Parisians mainly) bought at inflated prices in the early Noughties, put a lot of money into their properties, and are now trying to get their money back. And it’s not going to happen. Some are holding out … and some are cracking. I’m signing a compromis de vente next week with a client who has reduced his price from €700k to …€400k. He’s the realistic one: the others will still be there in two years. My advice to buyers is to make an offer of up to 30% less than the asking price: it can work.