French Property Insider Volume XI, Issue 38 Thursday, September 19, 2013 • Paris, France
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Living and Investing in France Conference -- Nice and the Côte d'Azur
September 27-28-29, 2013 Nice, France
Three Days of Exploring the Côte d'Azur!
If you've always dreamed of spending more time in France, enjoying a "pied-à-terre" of your own in Paris or Nice or home in the countryside that you can enjoy when you want...or profitably rent when you like...or just make a smart investment by owning property in France...then this three day conference and tour of the Côte d'Azur is a MUST. There is no doubt, from the hundreds of others who have attended conferences of this kind and fulfilled their dreams...this weekend in Nice will point you in the right direction to really make it happen!
Your Quick Guide to the Currency Markets By James Thorp, World First
If you’re thinking of buying in Paris, the sort of property you’ll be able to afford may depend on the currency exchange rate. The higher the value of the currency you’re selling, the more you’ll get for your money, but a lot of people always ask, how do the currency markets work, and what affects the exchange rate?
Well, quite a lot of things...actually, and number one is inflation rates. The lower these are in relation to other countries, the higher the exchange rate will tend to be. A low rate of inflation will lead to exports becoming more competitive, and so the demand for sterling (or other currencies) to buy goods in that country will increase.
Interest rates also have an effect on the exchange rate. The higher the interest rate in a particular country compared with another, the more attractive it will be to deposit money there. The return from savings will be better, and so the demand for currency will increase.
There are other things, like government debt, government intervention (e.g. strategies to deliberately weaken a currency to exports more attractive and stimulate growth) and political instability, all of which have a say in determining the exchange rates.
If you’re thinking an exchange rate couldn’t move so dramatically that it would make that much of a difference, think again. Looking back at the start of the year, the GBP-EUR rate (British sterling versus the euro) was at 1.234 on January 3rd, but by the 31st, this had fallen to 1.1672. This means that at the start of the month, £100,000 would have been worth around €123,000, falling to just €116,000 by the 31st. When dealing with larger sums of money, like you’d spend when buying a property abroad, you can see how a good exchange rate can make all the difference.
So, you see that a good exchange rate is important, but everyone seems to give a different rate. How do you know where you’ll get the best one? A lot of people go to their bank -- maybe it seems like the right option, and what they’ve always done. But, they might not be aware that there are FCA (Financial Conduct Authority) authorized experts, like World First, that are big, secure and reputable, and tend to offer faster transfers and better exchange rates than the banks.
There are two main types of transfer you can make: a spot rate and a forward contract.
With a spot rate, you can take the best available rate, and transfer your money straightaway. Or you can choose a forward contract and fix the exchange rate in advance. This way, you’ll know exactly how much will arrive at the destination.
As well as these, there are currency options, where you can protect yourself from wild fluctuations in the exchange rate, but also benefit if the rate goes in your favor.
Hopefully this has answered some of your questions about how the currency markets work. If you have any more, or want advice on making a currency transfer to buy property overseas, see James Thorp's contact information by visiting our Web page at French Property Loan.
GBP Hits a new Eight-Month High Against US Dollar By Moneycorp
The US dollar fell sharply last night after the US Federal Reserve’s shock decision to leave the existing QE3 (Quantitative Easing) $85 billion worth of bond buying stimulus measures in place with no end in sight. The Federal Open Market Committee also revised down their GDP forecast for both 2013 and 2014; signaling that the US economy is clearly not recovering at the pace US Central Bank would have hoped for.
Though, sterling’s advance to a new eight-month high against the dollar was checked this morning by weaker than expected UK retail sales figures for the month of August.
Given the current strength of the British pound, it is certainly worth looking now at any US dollar requirements you may have.
As House Prices Fall, Use Foreign Exchange Companies to get an Even Better Deal By James Thorp
If you’re looking to break out of where you currently live, and you’re being tempted by a move to France, now’s a good time to strike, as there are some great bargains to be had right now.
House prices are continuing to fall in France, with the national association of estate agents (FNAIM) reporting an average fall in house prices of between 2.5% and 3.6% in the past year. Despite local and regional figures often going unreported, which skews the figure somewhat, the figures from FNAIM make interesting reading, and suggest there may well be a deal to be done.
They say that every region, with the exception of Upper Normandy, has seen house prices take a tumble, and point to Lower Normandy, France-Comte, Picardie as places that have seen the biggest falls -- all down by more than 7% year on year. In these places, it would appear that there’s a deal to be done.
And with France still topping the list of popular places to buy a property abroad, with 22% of potential overseas property buyers from the UK looking to take advantage of a better climate and lifestyle but also the proximity to home which makes it a ‘safe bet.'
If you’ve decided to take the plunge, one of the major considerations will obviously be the finances, and the way you handle your currency transfers could really affect how much you spending on your new property. Exchange rates can fluctuate so dramatically that a property can end up costing you thousands more if you’re not careful.
For example, there’s a beautiful brick farmhouse in Picardie on sale right now for €223,000 with seven bedrooms, close to the town of Chauny, and in a natural setting -- it’s a great value property. But, by buying it now, it would cost you nearly £10,000 more than at the start of the year, such is the fluctuating nature of the exchange rate.
What you can do to try and combat this sort of shift, is use a foreign exchange broker rather than your bank. Not only will they ensure you get the best exchange rates, but you can also take a forward contract, where you can fix the exchange rate at a point in the future, so if the rate goes against you, you won’t suffer. So if you were moving in and paying for it now, but the deal had been agreed back in January, you could have locked in those better rates, and saved all that money.
P.P.S. There's only one share left of La Résidence Luxembourg! -- An airy, bright and elegant one-bedroom fractional ownership property tucked between the lushness of the Luxembourg Gardens and the grandeur of the monumental dome of the Pantheon in the popular Latin Quarter of Paris. You can be the proud owner of the last share of this exquisite apartment! Visit La Résidence Luxembourg at French Property Fractional or for more information email firstname.lastname@example.org
See Adrian Leeds and French Property Consultation On House Hunters International!
Air dates/times: October 13, 2013 - 11:30 PM e/p October 14, 2013 - 2:30 AM e/p
Dr. Jayne Lee fell so in love with Paris that she geared her career in medicine towards moving there. Soon enough she found a job practicing telemedicine and fell in love with Edouard. But for these newlyweds, buying an apartment in one of the most coveted and expensive cities in the world isn't as easy as falling in love. While Jayne needs an office as soon as possible, Edouard wants to be sure there is room for a future family. Property Consultant Adrian Leeds desperately searches for a compromise when House Hunters International goes to Paris, France.