New energy efficiency regulations will shake things up 

One significant development in the market is the focus on energy efficiency in properties. New regulations require an energy audit for properties rated F and G, with the aim of improving overall energy efficiency. A 600 year old property in Angers recently made the news in France, with Le Figaro reporting that the house was more energy efficient than many modern homes. While some view this energy efficiency shake up as a challenge, James Rolt, Regional Sales Manager at Beaux Villages sees it as a positive step toward a more environmentally sustainable housing stock. “Educating clients on the benefits and implications of these changes is crucial, with informed buyers making more conscious decisions.”

Changing buyer demographics

Katie Anderson of TIC Immobilier who are based in Ruffec in the Charente department, says “the diversity of our clientele mirrors the global allure of French real estate. From Australians to Americans, Belgians to Italians, our agency deals with a broad spectrum of nationalities. Simon Kerridge from Languedoc Property Finders specialises in representing primarily foreign sellers including French, German, English, Scandinavian, Belgian, Dutch, American, and Australian buyers. Simon acknowledges the decrease in inquiries from British buyers post-Brexit. However, he notes that the majority of sellers are driven by factors like reaching a certain age or a desire for change, rather than Brexit-related concerns. Additionally, he has seen a significant increase in enquiries from other European countries, such as Germany, Sweden, and Switzerland.

According to Notaires de France, the share of non-resident foreign purchasers in mainland France fell almost continuously between 2015 and 2020. The year 2022, post-pandemic marked the return of non-resident foreign purchasers, which account for 1.8% of housing transactions. It was all the more significant in the Provence-Alpes-Côte d'Azur region, where the share of non-resident foreign buyers increased from 3% in 2021 to 3.8% in 2022.

Evolving preferences of property buyers in France

Reflecting on shifting buyer preferences, Katie notes an intriguing trend among British buyers. Once drawn to rural tranquillity, they are now expressing more interest in town living, with Ruffec emerging as a favoured location. The shift underscores the evolving perceptions of what constitutes an ideal French living experience. Simon says, while the majority seek holiday homes to begin with, many transition to second homes and even primary residences over time. Having met French expatriates in the UK and interacted with individuals seeking a change in lifestyle, Katie highlights the contrasting dynamics between French and British expats. While France attracts retirees seeking tranquillity, the UK tends to lure young French professionals enticed by the vibrant lifestyle.

Where are people buying property in France? 

Notaires de France highlights Creuse, Alpes-Maritimes and Ardennes as the most popular departments for non-resident foreign buyers. Kyero's own data shows Provence, Occitanie and Poitou Charente to be the most popular regions, with Nice, Paris, Menton, Cannes and Antibes as the most popular towns and cities to buy a property for foreign buyers. It’s also worth noting that the Cote D’Azur has come out on top of Savill’s World Second Home Locations Index 2023, out of a total of 60 locations included in the review. “The French Riviera has it all,” says Harald, from Riviera Keys, an estate agency of 35 professionals across four offices in Nice, Antibes, Cannes, and Saint-Raphaël, “charming old towns, beautiful weather, great food, outstanding sport and leisure facilities, and of course, some of the most sought after real estate in the world.” 

Inflation and rising interest rates

The French property market saw a massive boom in 2021, driven by increased demand, limited stock, and low-interest rates post-COVID lockdowns. However, James notes, “2022 and 2023 have presented challenges to the market, including inflation, rising interest rates, and reduced lending by French banks, contributing to a decline in transactions.” The good news, as reported by Knight Frank in their latest Prime France Report, is that they are starting to see banks become more willing to lend to non-EU residents again.

Notaires de France recently reported that since August 2022, the number of property transactions completed over the last twelve months fell around 5% month by month. Since peaking in August 2021 at over 1.2 million acquisitions over a rolling year (between August 2020 and August 2021), volumes have dwindled. "By the end of 2023, we should see between 900,000 and 950,000 transactions in a single year.” 

House prices in France

The Notaires de France 2023 report also notes that house prices in France (with the exception of new builds) are on the decline. Despite the slowdown, James emphasises that the market is still active, with properties that are priced right and well-presented still attracting buyers. “The transition from a seller's to a buyer's market signals a return to a more stable real estate environment.”

The French property market, once booming, now faces challenges like inflation, rising interest rates, and shifting buyer demographics. Despite a decline in transactions and house prices, estate agents express optimism, seeing the market adapt to post-COVID changes.