Market for foreign non-residents: Purchases take off
BNP Paribas International Buyers has published the 8th edition of its Observatory of the market for foreign non-resident buyers in France, including a section on French expatriates.
This 2016 edition signals the massive return of foreign non-resident buyers with a market registering a 29% increase in the number of transactions. Helped by a strong pound boosting their purchasing power, the number of purchases by British buyers has shot up by 44 % in one year.
The Americans are back in Paris recording the strongest progression in one year: +91% with a very high average transaction amount of 911 000 €. They are the number one foreign investors in Paris with the Italians although they only represent 3% of buyers in the market.
In the total market for non-resident buyers (foreigners + French non-residents), the share of acquisitions by French Expatriates has reached 30%.
A significant rise in transactions
After several consecutive years of decline and then a slight recovery in 2014 (+1.5%), 2015 was marked by a strong increase of 29% of the number of purchases in the year. This tendency is confirmed in the first half of 2016 explains François Laforie, Managing Director of BNP Paribas International Buyers: “Demand has remained strong in the first 5 months of the year, France still attracts investors.”
In parallel, the average purchase price in France for all foreign buyers was down slightly by -1.5% at 310 000 €, and seems to have stabilized after a drop of 10% the previous year. Globally stable, in detail the average price progressed by 0.3% in the Paris Region at 583 000 € and fell by 1% in the rest of France at 284 000 €. Scandinavians invest the largest amounts in France, with an average purchase price of 510 000 €.
Paris is still the most expensive destination. The capital attracts Americans: purchases up by +91% from 2014 to 2015 – the strongest progression of any nationality. Whilst the Americans and Italians share the first place in Paris in terms of the number of transactions, the average purchase price is 911 000 € for the Americans and 573 000 € for the Italians.
Outside Paris, the most attractive regions in France are Provence Alpes Côte d’Azur and Rhône Alpes which concentrate 38% of transactions, followed by Languedoc-Roussillon, the Paris Region and Aquitaine. A significant progression of purchases in Languedoc-Roussillon (+37%) and Aquitaine (+45%) is worth noting also.
France: a choice destination for Britons
The British consolidate their first place with 34% of transactions completed, far ahead of the Belgians who represent 15% of purchases in the market. Then the gap shortens: the Swiss and Italians share the third place with 7% of purchases, closely followed by the Germans at 6%. With a market share of 4%, the Dutch and Scandinavians are at the tail end together with the Americans who represent 3% of purchases by foreign non-residents.
Transactions by British non-residents progressed significantly by 44% in one year after having already progressed by 33% from 2013 to 2014.
François Laforie, Managing Director of BNP Paribas International Buyers, explains this strong progression:
“British buyers benefitted from low interest rates and a strong pound boosting their purchasing power with an exchange rate of 1.43 in August 2015, a level not seen since 2007, in a country in good economic health. On the other hand, the Brexit referendum affects some Britons in their decisions, since March we have noted some requests to put projects on hold, as they wish to reserve their decision until after the referendum on 23rd June”.
Although the British non-residents have the highest market share of transactions, the average amount is 262 000 €, i.e. 18% less than the average amount for all foreign non-residents at 310 000 €.
French expatriates invest massively in France
In addition to acquisitions by foreign non-residents, the “Investing & Living abroad” survey also looks at the market for French expatriate buyers which progressed significantly in 2015.
The 7% increase in the number of transactions in France by French expatriates throughout the world from 2013 to 2014, was followed by a 27% increase from 2014 to 2015. In parallel, the domestic property market progressed in the same period by 16%. In detail, the progression is stronger in the capital (+33%) than in the rest of France (+24%). As far as the amount in concerned, French expatriates invest on average 317 000 €. However, this figure masks major differences: the average is 605 000 € in Paris compared with 251 000 € elsewhere. A quarter of purchases were in the Paris Region.
It should be noted that in the total market for non-resident buyers (7,9Mds€) including foreign and French non-resident buyers, expatriated French and British are in pole position with 30% and 28% market share respectively.
The complete survey is available on request.