The Sarkozy Effect

The French property market had a quiet May as buyers and sellers waited to see what happened in the elections. Since the elections, the property market has continued strongly with many investors seeing 5-7% increases and many predicting strong growth for the future.

The ‘Sarkozy effect’ appears to be good for buyers – both domestic and foreign – with many people looking to invest in the French property market. With a buoyant economy, the optimism is rubbing off on the property scene.

The new French president is rumoured to be bringing in radical new tax reforms with the aim of increasing property ownership in the short-term. These factors mean there should be strong demand for French property, which in turn means that property prices should continue to rise with some predicting that if the reforms go through, 2008 could see double figure property price increases.

Many investors are looking to the French market thanks to it’s relative security, something which the emerging eastern European markets lack. With a trend of stronger interest in older properties, buyers would be advised to look for their properties as soon as possible in order to grab a bargain.

The south of France is as popular as ever, particularly in the Languedoc and Cote d’Azur – the population of these areas has grown by over 20% in recent years and this has had a knock-on effect on property in the area, driving the prices up as demand outstrips supply.

The French government is also encouraging foreign investors looking at ski properties – buyers can take advantage of a VAT-refund incentive to buy freehold ownership of property that is currently managed by a property maintenance company. This means investors no longer need to worry about rentals or annual maintenance charges. The main ski resorts are fairly expensive – if you are looking for something which has more value for money, look for smaller villages within driving distances of the main resorts as these are often much cheaper whilst offering almost the same benefits as the main resort.

With the world worrying over the effects of climate change, many investors are now looking at ski resorts which offer more than just skiing. Resorts close to the coast and sea are popular so if the snow doesn’t come, the tourists still have something to do.

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