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France Remains A Secure Favourite for Overseas Investors - 22 September 2009

Real estate investors name France the most stable market for returns on overseas property, according to a recent survey of potential buyers. It’s also the top spot for U.K. buyers enquiring about property abroad according to overseas mortgage specialists Conti.

The country’s cautious and reliable financial history was noted as the greatest determining factor when making an investment in this rocky economy. While the rest of the European Union is struggling, capital returns in France fell only about 6 percent last year in comparison to the U.K.’s 26 per cent, according to the Investment Property Databank Index. Investment activity in the Paris metropolitan area is expected to reach between €4 billion and €5 billion by the close of 2009, according to economists.

The French real estate market is also quite welcoming toward foreign companies looking to make a long-term investment. Current interest rates are as low as 3 percent with some sellers providing financing and some vendors buying with large amounts of equity and then refinancing later. The rental market in Paris is one of the most stable worldwide because few properties have excessive debt levels, which in turn makes landlords less apt to raise rental prices.

Demand for French property is also is expected to increase as financing markets become less stressed. In the first quarter of this year, only 7 percent of property investments in France were from overseas investors; where as in the second quarter overseas investments rose 46 percent.

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