I’d like to
spend a bit of time today reflecting on where we are in the property cycle here
in SW France ; and how this is affecting
decisions that first time buyers are faced with when looking for their perfect
property in our current marketplace.
The first thing
that will strike you is the vast amount of property currently for sale, not
just in our region, but throughout France as a whole. There are a number of
reasons for this, but the principal point to remember is that property has
always taken a long time to sell in France. Two years was a very common amount
of time that a property used to be on the market. The supply was pretty
constant and buyers came along in sufficient numbers to keep that balance
level.
However
since 2008 that “two-year cycle” has been distorted by the Global Financial
Crisis, and in particular by the reluctance of lenders to now take on high ‘loan
to value’ ratios. This has caused a growing build-up of houses for sale, as
newly-marketed properties are added to the existing pool week by week. Houses that
would normally have dropped out after two years, are still for sale four years
after they first entered the marketplace, despite dropping considerably in
price.
Some estimates
have put this ‘supply pool’ at three or four times the historical average. The
affect that this has had on UK buyers entering the French Property Market for
the first time is one of confusion and uncertainty.
The vast
amount of property that there is in your chosen price range certainly means that you are “spoilt
for choice” but the logistics of trying to see more than a couple of dozen
means you will be spending a significant amount of time, expense and outlay
before you feel able to have the confidence to make an offer.
The
uncertainty is also compounded by the fact that the “perfect property”- by its
definition - rarely ever exists. When the supply pool was limited, buyers were
happy to accept that fact , and make offers on properties that closely matched
their ‘wish list’ However, where the supply seems endless, there is a huge
temptation to say to yourself “maybe the next one will be perfect” - well perhaps its might be - but you will see
a large number of further disappointments in the process, and run up
a considerable expense , both in time and money, in doing so.
I am not saying
here “do not do extensive research, or see all the properties you feel are suitable
for you” What I am really just trying to point out is the underlying physiological and psychological
processes that will be influencing your decision on whether or not to put
forward an offer on a particular house. Put in
another way, five or six years ago you would have identified a dozen
or so properties -in advance - that seemed suitable, and on your trip out, maybe seen two
or three that came pretty close to your “ideal” . You would therefore have felt that you
had made proper comparisons, identified a good short-list, and then felt
comfortable about making an offer.
Statistics
have shown us that, five or six years ago, the vast majority of buyers found
their “perfect property” on their first visit.
Today , three or four trips out are quite normal, and this can be put
down, I’m sure , to the reasons I have outlined earlier.
In
conclusion,
buyers are still there - and as Graham Downie a well-established
property Search Agent from Cognac wrote in his excellent blog , recently in increasing numbers. But they are being very cautious about “taking the
plunge” and committing themselves to a property with a firm offer.
In conclusion, excellent properties still exist , but the sheer volume of property currently out
there being advertised on agents websites and property portals, means it’s becoming increasingly more difficult to sort out the wheat
from the chaff.