I’d like to spend a bit of time today reflecting on where we are in the property cycle here in SW France ; and how this is affecting decisions that first time buyers are faced with when looking for their perfect property in our current marketplace.
The first thing that will strike you is the vast amount of property currently for sale, not just in our region, but throughout France as a whole. There are a number of reasons for this, but the principal point to remember is that property has always taken a long time to sell in France. Two years was a very common amount of time that a property used to be on the market. The supply was pretty constant and buyers came along in sufficient numbers to keep that balance level.
However since 2008 that “two-year cycle” has been distorted by the Global Financial Crisis, and in particular by the reluctance of lenders to now take on high ‘loan to value’ ratios. This has caused a growing build-up of houses for sale, as newly-marketed properties are added to the existing pool week by week. Houses that would normally have dropped out after two years, are still for sale four years after they first entered the marketplace, despite dropping considerably in price.
Some estimates have put this ‘supply pool’ at three or four times the historical average. The affect that this has had on UK buyers entering the French Property Market for the first time is one of confusion and uncertainty.
The vast amount of property that there is in your chosen price range certainly means that you are “spoilt for choice” but the logistics of trying to see more than a couple of dozen means you will be spending a significant amount of time, expense and outlay before you feel able to have the confidence to make an offer.
The uncertainty is also compounded by the fact that the “perfect property”- by its definition - rarely ever exists. When the supply pool was limited, buyers were happy to accept that fact , and make offers on properties that closely matched their ‘wish list’ However, where the supply seems endless, there is a huge temptation to say to yourself “maybe the next one will be perfect” - well perhaps its might be - but you will see a large number of further disappointments in the process, and run up a considerable expense , both in time and money, in doing so.
I am not saying here “do not do extensive research, or see all the properties you feel are suitable for you” What I am really just trying to point out is the underlying physiological and psychological processes that will be influencing your decision on whether or not to put forward an offer on a particular house. Put in another way, five or six years ago you would have identified a dozen or so properties -in advance - that seemed suitable, and on your trip out, maybe seen two or three that came pretty close to your “ideal” . You would therefore have felt that you had made proper comparisons, identified a good short-list, and then felt comfortable about making an offer.
Statistics have shown us that, five or six years ago, the vast majority of buyers found their “perfect property” on their first visit. Today , three or four trips out are quite normal, and this can be put down, I’m sure , to the reasons I have outlined earlier.
In conclusion, buyers are still there - and as Graham Downie a well-established property Search Agent from Cognac wrote in his excellent blog , recently in increasing numbers. But they are being very cautious about “taking the plunge” and committing themselves to a property with a firm offer.
In conclusion, excellent properties still exist , but the sheer volume of property currently out there being advertised on agents websites and property portals, means it’s becoming increasingly more difficult to sort out the wheat from the chaff.