French Property Insider Volume XVII, Issue 21 Thursday, May 23, 2019 • Paris, France
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June 11, 2019
John Pearce, Author
ohn Pearce is a part-time Parisian but lives most of the the year in Sarasota, FL. He worked as a journalist in Washington and Europe, where he covered economics for the International Herald Tribune and edited a business magazine. After a business career in Sarasota, he spends his days working on his future books. For several months each year, he and his wife Jan live in Paris, walk its streets, and chase down interesting settings for future books and his blog, JohnPearceAuthor.com. They lived earlier in Frankfurt, Germany, which gave him valuable insights for several of the scenes in his books in Paris.
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hile I'm in La Nouvelle Orléans celebrating my sister's monumental 80th birthday with family and friends — and possibly dining on crawfish and gumbo — there are a few reports recently issued you might find very interesting indeed. First off, the French property market is still reporting positive trends. Be sure to read our first entry, a reprint from notaires.fr/ with some editing and commentary:
FRENCH PROPERTY...ANALYSIS OF THE MARKET
The analysis of the real estate market is derived from the French property marker report of the Notaires de France. It presents the real estate situation in France: the trends and evolution of real estate prices.
With 970,000 transactions for resale properties in the French Provinces, 2018 ended as it began! The number of transactions recorded at the end of last year is markedly similar to the number of transactions recorded little more than a year before (968,000 transactions in December 2017). The symbolic milestone of a million transactions was therefore not reached in 2018.
In property as elsewhere, there are now barely any markets that can be modelled over the long term. For better or for worse, this is a worldwide economic trend that we have to now get used to. Admittedly, analysis of volumes from the last 20 years (and particularly the 2000–2008 period) could count on thresholds close to 850,000 transactions. This would however completely disregard two decades of house-building and the number of mutable housing units, which have increased considerably.In addition, none of the parameters known to date suggests a risk of stalling in the short term:
* Interest rates, fundamentally and historically weak, put purchasers in good financial standing and enable those who had previously left the home ownership market to enter it again. * These rates seem set at low thresholds, at least in the short term, which motivates people looking to buy, across all categories. The property market, massively influenced by borrowing, is undeniably affected. * Property remains a safe investment, with few equals. Individuals’ confidence in this market does not seem to have been affected by the social unrest in France over the past few months. * Although very often stated as being in a sharp upturn, prices generally remain stable and are even falling (without even taking into account any corrections for the effects of inflation); the upward trends of Greater Paris and several regional centers (Nantes, Rennes, Lyon and Bordeaux in the main) are not indicative, in themselves, of the national market. * As such, it is interesting to note that overall, since mid-2018, the upward trend in apartment prices does not even apply to half of the departments of France (45% rising, against 40% falling and 15% stable).
On this last point, we do not believe, however, that this relative disparity in prices in the French Provinces is indicative of a rupture heralding a downturn. On the contrary, insofar as the 2017 trend by department was generally rising (for around 60% of them on average), it seems, conversely, to herald price stabilization and, consequently, the market settling down. The general price stabilization is such that it effectively maintains increased transaction volumes and, therefore, a dynamic market in good health.
As such, it should be noted that even Bordeaux, which has seen double-digit growth for almost 3 years, is seeing its upward price trend slowing (in median prices, +5.7% over one year for older apartments in the fourth quarter of 2018 and 8.3% for older houses). This is a good omen, as its recent performance seemed less and less consistent with the average income of its inhabitants and its rental market, to speak only of parameters purely linked to access to housing. Let us hope that this rough adjustment reflects a ceiling reached, and that it is not made of glass. Lyon, recently overtaken by Bordeaux in terms of price, is now showing higher growth, enabling it to retake its position!
Geographical location and the amount of jobs are determining factors. There is thus clear correlation between the property market’s vigor and development of the labour market. Gaps continue to widen between areas that are sought-after due to healthy job prospects and other areas. The further one gets from economic centres, the more complicated the situation in terms of the resale market. The divide between these two Frances is a little more evident in a market that only remains dynamic in strong economic centers.
Changes in projected indicators based on pre-contracts in mainland France: According to early indicators up to May 2019, the upward trend is continuing at around 3% per year. At the end of May 2019, the annual change is around +4.4% for apartments and +2.4% for houses. According to early indicators on pre-contracts from Notaires du Grand Paris, prices in the capital should reach €9,790 in May 2019, which amounts to a rise of 6.3% in a year.
French property market report - April 2019 - trendsIn the French provinces, the trend shown by the early indicators should roughly mirror the national trend with a predicted annual rise of 4% on the apartments market and 2.2% on the house market at the end of May 2019.
For apartments in the largest towns, the prices in Toulouse, Bordeaux, Rennes, Nantes and Lyon are expected to continue to progress at between 5% and 10%. In Marseille and Montpelier, prices should be levelling off.For resale houses, prices in the main agglomerations should remain in an upward trend, with the exception of Toulouse which is levelling off.
In the full market report is a special article about THE NEW MOBILITY LEASE. Here's your chance to get to know a bit more about how to rent your Paris property from one to 10 months...legally!
Created by the Elan law, the mobility lease is a short-team lease agreement for a furnished property. It gives the landlord more flexibility and eases access to housing, particularly for students or people who move around for work. The landlord cannot demand any security deposit from the tenant. They can, however, demand a guarantee, facilitated by the VISALE rental guarantee mechanism (VISA for housing and employment). In the event of cohabitation, the landlord cannot impose joint liability between the co-tenants or their deposits.
Details of the mobility lease:
• Maximum duration of 10 months, non renewable. • Intended for students and people who move around: professional transfer/temporary assignment/vocational training/work experience/apprenticeship/voluntary work (as part of civic service). • Rental charges paid as a fixed rate. • No administrative declaration or authorization for the owner. • No security deposit for the tenant. • No joint liability clause for the tenants or their deposits. • The department’s conciliation commission is not competent to judge disputes concerning the mobility lease. • Provisions concerning the mobility lease are a matter of public policy. • The premises subject to a mobility lease are meant for habitation.
And finally, we keep you up-to-date on FATCA news thanks to...
Article by Helen Burggraf, Editor The American Expat Financial News Journal is published by Anemos Creative Ltd.
Assembly National and FATCA
A report published today by two members of France’s Assembly calls on the French government to urgently engage in further negotiations over FATCA, and if necessary abandon it altogether, if it is unable to resolve the "extra-territorial tax" problems currently being faced by thousands of French citizens who also happen to be Americans.
Today's report is the latest in a series of indications that a growing number of countries around the world are becoming increasingly unhappy about FATCA – or, as this report points out, the combination of FATCA with America's citizenship-based tax regime, which is said to be unique in the world, apart from Eritrea.
FATCA (the Foreign Account Tax Compliance Act) is, of course, a package of regulations that was signed into law in 2010, which has enabled the U.S. to enforce its citizenship-based taxation regime for the first time, with major unforeseen consequences affecting American expats ever since.
Last month, as we reported at the time, a U.S. Government Accountability Office report acknowledged that FATCA was causing severe problems for those having to comply with it, and noted that it had contributed to a "nearly 178%" increase in the rate of American citizenship renunciations between 2011 and 2016.
Court cases challenging the constitutionality of FATCA have taken place in a number of countries in recent years, including the U.S., Canada and France, and there has also been growing criticism of the fact that FATCA has enabled the U.S. to avoid participating in a similar, but global, automatic exchange of information program, and thus enable some individuals to hide financial assets in the U.S., tax-haven style.
French lawmakers’ report on ‘accidentels’ says France should consider unilaterally giving up FATCA reporting. Find out more here: americanexpatfinance.com/news/.
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MEET THE AUTHORS IN NICE
June 15th, at the Scotch Tea House (4 avenue Suède)
* Lisa Anselmo: My (Part-Time) Paris Life * Jorge Armenteros: The Roar of the River, The Book of I, AIR * Craig Carlson: Pancakes in Paris, and soon to come, Let Them Eat Pancakes * Mike Colquhoun: Returning * Cathie Fidler: Hereng * Margo Lestz: Berets, Baguettes, Beyond * M.D. Poole: Dogs Never Lie * T.J. Riley: Ladies Invited * Debby Woods: Girl Lost Found
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