If you're thinking of investing in property in France, then it's important you know which parts of the country are growing in value, and which are stagnating. With the French economy flat, domestic demand for property has cooled off in recent years. It's now really foreign property investors that are helping prices in certain areas to rise.

In a recent Paris press conference, FNAIM president René Pallincourt announced his predictions for the French property market in 2006, as well as figures for the previous year, and it looks as though the tide is well and truly turning as far as the ?go-slow? in real estate values is concerned. FNAIM figures show that the south east of France (comprising Languedoc-Roussillon and Provence-Alpes-Côte-d?Azur) is the only place where real estate prices are currently growing at a similar or better rate than last year. Growth rates for French resale property (new build is not covered by the FNAIM figures) in the south east were a healthy 10.3 per cent for the first quarter 2006, up from 9.3 per cent for the same period the previous year. Across the rest of the country, vendors will be gloomy as the downturn in growth rates for French property continues apace. Values have seriously lost their va-va-voom in the Ile-de-France region. Comprising Paris and outlying areas, this part of France has long been beloved of investors hoping to make a pretty profit, but it would seem that for now, at least, the party is over ? Monsieur Pallincourt describes the slowdown of Ile-de-France house prices as ?spectaculaire?, a term that needs no translation. For those who need it spelled out, here are the hard facts and figures: Ile-de-France property prices were only increasing at a rate of 4.9 per cent in the first quarter of 2006, compared to a rate of 14.2 per cent at the for the same period in 2005. And the moral of the story? Look to the Languedoc-Roussillon region(or pricier Provence, provided you?ve got the cash to splash) for a safe bet. Sustained, long-term growth combined with 300-plus days of rays per annum makes for a sunny outlook, whether you?re buying a holiday home, a house for retirement, a permanent pad or a pure investment product.

But don't forget, speculating on property in France is still a gamble, even if you find that gorgeous farmhouse in booming Languedoc. You'll pay around 7% immediately for lawyers? fees, and when you come to sell, estate agents fees can be anywhere between 5-10% (how do those London agents survive on 1.5%!). There's also the problem of finding a buyer. From August to the end of December, the market, even in Languedoc, is very slow. And of course, some properties have much more of an allure than others. The English, particularly, demand some sort of outside space, and many buyers, especially retirees, aren't in the market for ruins or houses that need a lot of work, that you've bought at a seemingly low price and are hoping to sell at a higher one. Most people want something that they can just move in and use on day 1.

So Languedoc it is then. With France's best beaches, spectacular scenery, never-ending sun (well almost) and cheap flights, it France's boom area for property investment.

Posted by Wayne Sherlin on December 13, 2008 at 12:00 AM

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