What Will Hollande's France Look Like to the Investor?

We had it pretty good under the Bling Bling president. While we didn’t much care for his flashy arrogant exterior, ex-President Nicolas Sarkozy wanted the French to work more and earn more. He tried to inject a few capitalist ideas into a population of people who otherwise have a strong sense of entitlement. This goes back as far as the French Revolution — almost to the day, 223 years ago, when the monarchy was overthrown and power was given to the people. The French have a long and strong memory of what it was like to live in poverty while the wealthy lived extravagantly. In two days on July 14th, they will be celebrating this freedom and what the Republic stands for.

In the years Sarozy was President, the French started to think about investing as a way of making their hard-earned money grow…in new small enterprises (the “Auto-Entrepreneur” syste
m), in the stock market and in property. It contributed to the growth of the real estate market as both the French and foreigners believed that France was a top investment spot in the world where one could achieve a really good return on investment. And it was true.

Since the late 1990s, we watched prices rise, the rental market boom and the real estate industry as a whole prospered. Even while the U.S. and other markets were crashing, France held a strong position, floating right through the recession as if on a big flat barge while the ships were sinking around her. People who worked hard and invested in the boom, prospered.

I am writing you from New Orleans where I am celebrating my mother’s 95th birthday(!). As I entered the U.S. and went through customs, the officer who surveyed my passport asked, as they usually do, why I live in France. This time, he wanted to also know what I did and when I said “real estate,” he asked if France had experienced the same crash as the U.S. He also wanted to know if you could “flip” property like one does Stateside. It was the first time a customs officer had ever expressed an interest in France and it was impressive.

Then I went through the routine of transferring to another plane at  another terminal, coming upon one happy, helpful person after another doing their jobs in seemingly great moods. A TSA agent was doing a stand-up comedy routine while directing people to take off their shoes and place their items on the rack for inspection. At the terminal, signs of capitalism abound from the food courts to the boutiques and kiosks. It reminded me of how we perceive “freedom of enterprise” in such a different way, especially now that a socialist is in power in France.

Now, with François Hollande as head of state, we may see things change. His policies are designed to level the playing field and make life more affordable for everyone. The ideals are good — everyone wants everyone to prosper and have all they can have, achieve all they can achieve, but the question is: Who will benefit? Will those who have worked harder to earn more have done so for less reward?

All we can do is watch and follow the trends. As the very wealthy are fleeing France to escape high taxation, will that leave an opportunity for others to prosper as they once did? Will prices lower providing better investment opportunities? Will more people be able to afford more or more people afford less?

We will watch. We will follow the trends. We will learn how to be a winner and not a loser in this political game of prosperity. And one thing is for sure, those who are not prospering will rebel…just as they did during the French Revolution.

Mark my words.

A bientôt,

Adrian Leeds
Editor, French Property Insider

Email: [email protected]

 P.S. Next week FPI will come to you from Costa Rica where my daughter and I hope to take in a bit of the tropics. There may be delays as a result of the traveling, so please have patience with us!

P.P.S. Special offers on apartment rentals:

(1) La Paris Plage and Le Parisol – Special Offer: July 17 to 27

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