Cost of living in France
France is a reasonably wealthy country, the cost of living in France is therefore fairly high.
The French housing market's recovery in 2016 and 2017 has been very marked, but it has not been evenly spread across the country. However the property prices have risen in all the regions.
Paris, unusually, is no longer top of the list for price rises, though it still comes close. And there is always a higher demand in properties (both new devs and resale ones), thus the house prices in Paris are not going to fall these days. The thriving cities of Bordeaux, Lille, and Lyon are seeing the greatest growth in property prices. And there is no surprise, e.g. Bordeaux has now a close connection to Paris due to new high speed train line (now it takes approximately 2 hours to get to Paris). However, there's also a list of laggards as some cities are not getting the benefit of a rising market - while Toulouse is still doing well at 4%, Marseille (+1.3%) and Nice (+0.6%) are falling behind.
Several areas are seeing price falls. Limoges and Tours are slightly down, but Doubs, Perpignan, Clermont-Ferrand and Besançon are seeing more significant declines, while Le Mans is left far and away the loser with a fall of 6.7% in asking prices in the year to March 2017.
The first half of 2018 has also been marked as the dynamic time for real estate prices as well as loans borrowed. Since the interest rate is quite stable for the last years (and makes ~1,4%), it allows house buyers win the deal which is also a great opportunity for house sellers. But the experts say the interest rate may rise in the coming 2019 which can make the house prices lower due to falling demand. Thus check your budget, think about financing options you have an start communicating with the professionals (brokers, real estate agents and independent real estate consultants).
% increase in asking price, year to March 2018:
|How much below asking price to offer in France? Is cash buying giving bigger discount?|
|In the french market for resale properties you are free to make an offer lower than the asking price. 10% below the asking price is not uncommon. However, in a fast moving property market with constrained supply, like central Paris or Bordeaux, you may be disappointed by the response. For new developments, you may get a special deal if you are among the first buyers - the promoters need to sell a certain number of units before they can start construction. However, you're more likely to get added features or higher specification of finish than cash; you might also get your notaire's costs paid. At the other end of the development cycle, the last flats in a development could sell for a discount of up to 10%. Because of the clause suspensive regarding finance, a cash buyer does not offer the same advantages to the seller as in the UK, and discounts are likely to be limited to 3-5% off the asking price.|
Rental yield, %:
Investment buyers might be more interested in the relationship between sales prices and rental levels. While a Paris apartment, rented out, will make the landlord less than 4%, there are a number of French cities where rental yields remain significantly in excess of 6%. Buyers need to do their homework though; although Saint-Etienne offers a 9% gross yield, it can take four months to find a new tenant, against just 33 days in Paris.
Buyers looking at rural properties will find that some departments cost significantly more than others. Obviously, rural properties within commuting distance of Paris will be relatively highly valued, not just in the Ile-de-France but in pockets of neighbouring departments such as Eure and Eure-et-Loir which have access to good train connections.
The same goes for areas close to major cities such as Toulouse, Bordeaux and Lille. However, whole areas of central France (Limousin and the Massif Central) remain generally undervalued, as well as parts of Brittany.
Rental levels tend to follow property prices. Paris is by far the most expensive city to rent in, even outside the centre of the city, with a three bedroom city centre apartment costing well over EUR 2,000 a month. In Toulouse, the same apartment would set you back only EUR 1 100.
Monthly rent for apartments, EUR:
|Monthly rent for 3 bed city centre apartment, EUR||Monthly rent for apartment outside city centre, EUR|
|Paris||2 396||1 692|
|Nice||1 358||1 060|