That is the accepted wisdom for the USA. The reality is alot different with serious over-hang of properties in default which the banks are not willing to foreclose to avoid having the maintenance and RE tax costs while they wait for qualified buyers.
Carol, to be absolutely fair, you know very well the Eymet area and thereabouts are unlike most other parts of Aquitaine. It is historically an area where the prices went up faster than the rest of the SW, went higher and were a far better investment than elsewhere, even 45 minutes away where I am. There is no comparison. My OH talks to her colleagues covering your area and they are helping drive prices down in order to get their commission. They have no choice. Some people are holding their prices and others, like the American fellow, raising them. They are on a hiding to nothing as a rule. UK estate agents are beginning to look for other countries to trade in and also some of the more successful ones are taking over ones with UK and French owners, so the number is shrinking. Wilson, who you will know, is now part of Leggett for the last couple of months although you will still see their name in Eymet. Further over this way, properties in more 'desirable' places like Tremolat are sliding down irrespective of the nationality of the owners. We know somebody who bought a house with seven rooms in Le Buisson for €25,000. OK, it needs modernising but he has moved in and since he is a plumber that is where he is starting. It went on the market above 100K two years ago though.
The market, so I hear over dinner very often, is in such a state that price drops of less than 50K simply do not work any longer. My OH has just had her status as an academic acknowledged here and is being bulletined on posts going now. Under certain circumstances a job offer would mean moving, even a full professorial salary in France is enough to warrant that, and we know we would lose a terrible amount of money from the time she has spent in estate agency. So we would hang on to it and ride out this period, work on it and sell when the turn around comes which may well be 10 years away. What is different is that, and other SFN people are the same, we are living here in line with the economy and dropping the utter nonsense of comparison, which it is for us if not for people who want out and back to the UK. I also remember you said which agent you are with now and knowing that the people in their offices chat with each other and it is their trade gossip, that that agency with mainly upper price range properties on its books is struggling fairly seriously. Many of the properties on their books are with three or four agencies, as each one goes out to get place on their books the asking price goes down, so one of your agent's properties on their site that my OH has are 150K difference and a French agency has recently shaved off more - it is French owned and so far she has only had people from the USA and Australia view, it is too expensive for UK customers.
So, all in all, here in the Dordogne it is a far more complex picture than people think. There is no real influence from where vendors or buyers are from and whether the agency is French, UK originating/based, Dutch or German. It is a thorough mess and we are all in it up to our sad necks.
The USA has really managed to pull itself out of the mire...property still struggling in some parts....but considering, its doing a lot better than most of Europe. I have a sister in law who is Filipino...and she is thinking of buying land as well. My son in Dubai is also thinking of buying there, not sure how good an investment that may be.
We used to live in a small cul de sack of 12 properties, ours was the largest as a previous owner added a granny annexe and a swimming pool....one of the houses just sold there, for 30k more than we sold for 3 years ago and its considerably smaller as is the garden....so prices def. rising here...
Don't disagree with you about Europe in general. However on New Orleanns I was talking with a friend with connections there only yesterday and he said that it's very depressing there, but good in some other places in the USA. My wife just bought some land- above Tsumnami level- in the Philippines!
Several properties have sold in my village....at least 3 owned by English people and we know how much they dropped their prices by.
We are with 3 French agents and one British Agent....the French agents refused to drop our price when we said we would like to reduce by another 25k, telling us it would make no difference as the market is just not there in the Dordogne for Bourgeois property in that price range and our price is well under what they consider its present value; the English agent is happy to drop the price having told us better to take the hit now than risk another 30% loss in late 2013.
We know one French lady whose property was on the market when we came on holiday here...7 years ago....the price has remained fixed...and she will sell when someone is willing to pay her the full price. Thats fine if you are willing to wait.
Paris is not France as others portray it. In fact, my wife who is selling part-time will say that the French are more flexible on price drops. The only person who put up a price is one of your countrymen who is not getting viewings at all any longer (surprise, surprise) and a lot of UK people do indeed have a lot of capital to lose but are trying not to. The French are dropping prices by a lot, but there again many of them have owned since prices were very low. French buyers are also, so she says, the only ones not trying to push for hard deals on reductions but accepting the asking price. But there again, the difference is my wife is word perfect in French and her English pretty fluent unlike many other agents on both sides and most certainly the vendors.
You are a lucky girl... a cash buyer on the other hand seems to scare the bejezus out of the French ... There is no way I want a mortgage over my head so I know exactly how large a check is possible.For some reason the sellers I've tried to negociate all demand I go for a mortgage.... completely crazy considering how little (percentage wise) we were apart!
Agree with you, Carol, about the French hiking the prices! It was very evident when we were buying 13 years ago; we even found some agents with two prices for the same property - one for the French and one for the Brits! And those French who sold were often the same ones complaining about the British buying up all the property in the area and driving the prices up!
We bought in 2005 and have spent a great deal of money modernising our house and gite.
We are also here for the long term and, because our pension is not providing what we hoped for, we are having to work on letting the gite much more commercially than we had previously intended.
We bought from a French couple, the husband actually dying during the process. They were helpful and had a realistic base price.
We are still in contact with Madame.
Not all people are the same!
That Christopher, is because you are trying to buy from French people. We noticed when trying to buy that many French people will not consider negotiating....they will wait it out till they get what they want. The house we bought had been offered on several times before we came along...and the grudging 5k reduction ensured that when they left they took all lightbulbs, loo roll fittings...in fact anything no nailed down was removed. According to our agents....non French are reducing their properties but most French are hanging on in hope.
I have been searching for a home in Paris area, will pay in all cash and could close within 30/90 days. There is no interest in negociation. Unless I am nuts, the prices do not seem to have come down at all or the sellers are simply listing to see what they can get. I often cannot even get a timely response.
Dont entirely agree David. The Brits per se were not entirely responsible for the hike in the property prices in France....the French who were selling the houses and who purposely hiked their prices to sell to foreign buyers are the ones at fault. When we bought in 2009, it was from a French couple. We tried on three occasions to negotiate the high price down...and got a 5k reduction in the end....and we are now trying to sell for about 130k less than we paid in total for the property.
By comparison...the property prices in Newbury where I am now living are rising, and the average time properties here are on the market is under 8 weeks. Properties in the South, South East, South West and West are rising....along with parts of the Midlands and the East of England.
Interestingly....some areas in the USA such as New Orleans have one of the fastest growing economies in the world.
One of the most powerful reports I have read lately, suggests that Europe will have another 50 years of austerity, with minimal growth, whilst the USA, China and Asia will come out the winners.
What has happened in mainland Europe is a loss of faith in the Euro, hence the fall in property prices and most non Europeans don't wish to risk money in Euroland.....but property prices on the whole in the UK fell for a couple of years and are now rising again. Property in Australia is booming and in the USA are beginning to recover. We are about to offer our property fully furnished to see if that helps.
These things are not in isolation. Look at prices in the USA annd Spain. Even in Kent a relative moved into a nursing home in 2008 (she held on for years before she moved into the nursing home) and the agents said about £1.1 million. She missed the market completely. It sold for £660k! HMRC missed out on 40% inheritance tax on the balance at least! The only place where prcices seem to have held up really well are in the property hotspots usually bolstered by the very rich arriving to avoid taxation or political instability. The Brits are themselves to blame for the previous hike in provincial French prices and many a Frenchman has benefitted, as as many a French commune. In ours about 25% of taxes foncieres and habitation are paid by the Brits! Property has always been pass the parcel.
I am in D82 and the situation here is much the same. Brit retirees bought before the crash in 08 and invested a bundle modernizing their properties... then their pensions imploded and the pound dropped against the Euro. They are trying to cash out even, with little success. The few who do sell take a haircut and retreat back across the channel, tails tucked.
I think that when we bought in March 2012, the slide was just beginning. We made an all cash offer, which to our surprise was accepted. There are bargains to be had in and around Jarnac if you got the means to close without delay. Locals are talking alot about the new LGV tracks going by sooner or later, which may help the property market?
We are happy so far and hope that if we need or want to sell in a few years, that the property will find a buyer at the right price.
http://theceliachusband.blogspot.fr/2012/03/la-maison.html
Here in the North Charente there has been some movement, but as others have already said prices are falling. Two properties in the village here have gone for much less than they were on the market for - and the vendors have heaved a sigh of relief that the deals have gone through. One of the properties was French-owned, had been empty for years, needs much renovation - the asking price was realistic (in French terms!) but they still had to take a 20% hit to sell it (to Brits).
Talking yesterday to a French friend - an insurance agent, as it happens - he was telling me that his new 'property insurance' business has declined by over 50% in the past year. The current 'wisdom' apparently is 'if you might want to sell in four/five years, put it on the market now, because it may take that long to find a potential buyer'.
My feeling is that a lot of people are 'locked in' - not because they are unable to take the potential 'loss', but simply because, at any price, there is no chance of selling.
Absolutely right Ben. Sellers have woken up to the fact that their 'silly' prices were condemning them to wait two or three years for a buyer to come along: now they're slashing one or two hundred thousand off the price and getting people interested. A client of mine did this recently (my job - as an estate agent - has been reduced to persuading people to be realistic) and has had a bunch of visitors - Belgians, Brits and Scandiwegians. http://www.gitesforsalefrance.com/021.htm
We have a village house for sale in Lezignan-Corbieres, which has been on the market a year and a half. Viewed a couple of times and we have dropped the price 50 thousand euros. The agents don't seem to worry about selling at all, and asking for advice is like insulting them. All I hear from them is the market is slow.I think it might take a loooooong time!
In the wild Monts d'Arree prices are certainly lower than they were. However they were wildly excited by incoming mainly Brits a few years ago. Brits who want to sell usually have wildly over inflated prices and the houses remain on the market for years. You have to be very careful. Incomers buy old houses sub 100k euros at the moment, a few Brits, Irish, Parisiens. Locals buy plots and build noddy boxes with plastic windows. Prices on the nearby coast are about double and rising steadily. Here in our village you can buy a refurbished house for about 700 euros per sq metre, often with outbuildings as well, on mains drainage. A cottage in the woods is about half that per sq metre. Happily I bought in a very long time ago and paid very little so I have been able to take the very long term view. Many Brits made mistakes.