2022-07-05-莱坊-Prime_France_Report_2022_7页_3mb

PRIME FRANCE REPORT 2022 Summary

Core Content

France's prime residential market has shown strong performance in 2021 and early 2022, marked by increased sales and price growth. The market is influenced by a combination of factors including limited supply, strong demand from both domestic and international buyers, and favorable currency dynamics for US buyers. Additionally, the post-pandemic shift in buyer behavior and investment strategies has further fueled market activity.

Key Trends

1. Record Sales and Price Growth

• Residential sales in France were 31% above the 10-year average in 2021.
• Prime prices increased by 6% on average in 2021, with an additional 3% in the first half of 2022.
• The French Riviera and Provence have seen particularly strong performance, with sales up 28% in the first half of 2022 compared to the previous year.

2. Urban Revival in Paris

• Paris has experienced a resurgence in demand, with prime prices rising by 6.3% in 2021.
• Infrastructure investments (e.g., Paris Olympics and Grand Paris Project) are expected to boost investor interest.
• Private equity funds are increasingly targeting Paris as an inflation hedge.

3. Currency Advantage for US Buyers

• In June 2022, US buyers saw a 16% price discount in France due to currency shifts.
• US property searches on Knight Frank's website increased by 37% in May 2022 compared to the previous year.
• The Fed's faster rate hikes compared to the ECB are expected to increase this discount.

4. Brexit Impact on Financing

• British buyers face a reduced pool of lenders in the EU, impacting mortgage accessibility.
• Knight Frank Finance advises British buyers to seek early financial guidance to navigate this challenge.
• The new 7.5% social charge for British second homeowners in France offers a financial benefit.

5. Return of the Rental Investor

• The holiday rental market is seeing a return, particularly in areas like Cannes and the French Riviera.
• US, Belgian, Swiss, and UK buyers are leading international demand for holiday rentals.

6. Sustainability and Lifestyle Appeal

• Sustainability initiatives are influencing buyer choices in the French Riviera.
• The Alpine region continues to attract buyers looking for year-round amenities and increased spending time in their properties.

7. Provençal Market Dynamics

• Provence has become one of the most active markets in France, with enquiries up 50% in 2021 and 10% in the first four months of 2022.
• Buyer motivation has increased due to low stock levels, with sales up 28% in the first half of 2022.
• The €1 million to €2.5 million price bracket is the most active segment in Provence.

8. South West France

• The South West offers compelling value relative to other prime areas in France.
• The €500,000 to €750,000 price bracket is the most active, attracting a younger buyer profile.
• French and UK buyers are key to the market, with increased interest from US and other international buyers.

Key Statistics

International Demand

• US buyers are the top source of overseas leads for Knight Frank in 2022.
• British, Belgian, Swiss, and US nationalities are the leading international buyers in Provence and other regions.
• Scandinavian, German, and Swiss buyers continue to dominate international demand in the French Alps and Riviera.

Outlook

• Sales activity is expected to remain healthy but with a muted pace in 2022.
• Uncertainty due to the Russia-Ukraine conflict and rising inflation is affecting buyer sentiment.
• Investment in infrastructure and economic confidence are expected to boost market resilience.

Summary of Key Factors

• Limited supply continues to support prime prices.
• Currency shifts offer a discount for US buyers.
• Post-pandemic lifestyle preferences are driving demand for properties with amenities and connectivity.
• Brexit has reduced lender availability for British buyers.
• Private equity and international investors are increasing their presence in key areas like Paris and the Riviera.

Team Expertise

• The French team has an average of 15 years of experience.
• They provide expert knowledge and insight into the prime property market.

Conclusion

France's prime property market remains robust and attractive, driven by strong demand, limited supply, and favorable financial conditions for certain international buyers. While challenges such as tightening financing and currency fluctuations exist, the opportunities for investment and lifestyle continue to draw a diverse range of buyers.