France: anxiety gives way to stability

France: anxiety gives way to stability

The decision of French socialist president Francois Hollande to introduce 75% tax on the wealthy Frenchmen surprised the World. And although the initiative was blocked and the French Council of State recommended to reduce the tax rate to at least 66%, wealthy French began to leave the country. EE24.COM contacted Elena Belutti, director of the French real estate agency, and find out how the real estate market has reacted to the initiative of President Hollande.

How would you evaluate the state of the French real-estate market at the moment? What trends are typical of late?

The property market in France is quite stable, despite the crisis, which has affected many European countries. France remains one of the most advanced countries in terms of tourism industry development, and real estate in Paris and on the Riviera is always very popular    among foreigners. Political and financial stability of France attracts foreign investors who invest in real estate and personal objects, which are than rented out. In addition, investors are attracted to French education system (to the opportunity to send their children into a prestigious school or college), and also by good health care, that offers the best conditions for disease treatment and prevention.

How did the tax policies of President Hollande reflect the market?

When Francois Hollande announced his political program, it caused anxiety in French society. However, now it is clear that the socialist government is not able to bring to life most decisions of this program. At the moment, all the changes are related only to people with high incomes, but it was clearly a negative signal for the French and for foreign investors. Now anxiety gradually subsides. France remains a very stable country where private property rights are protected by the state.

In what French regions is it better to buy property nowadays? Which property is better for living, and which is for rent?

Both are situated in areas where property prices are rising steadily over the years. I’m talking about Paris and the French Riviera (from Saint-Tropez to Monaco). In this region the risk of losing capital is minimal. Apartments for rent must meet specific criteria, such as proximity to the sea, nice view, terrace, own parking lot. These are the main requirements for real estate, placed in the tourist regions of the country.  

What can you say about bank property in France?

This type of property is not very common in France. Such sales take place about once a month, but none is really interested in them.

How do you think the market will develop in the nearest future?

Despite the European crisis, the property market in France will be stable or even go up. In any case, there is no reason for price reduction. Riviera, Paris, Monaco are still of interest to investors. On the Riviera the number of middle-class investors with average budget of €600,000 is increasing. For this money they acquire decent apartments with a sea view. The average price of square meter in Nice is now about €5000, which is available, for example, for residents of the Russian capital.

The interview is taken by Ivan Ulitin, EE24.COM.