With rates historically low, there has never been a better time to finance a property acquisition in France, protected by the current Euro zone monetary policy. At the end of last year, an increase in interest rates was expected, fuelling a record demand for house loans. What actually happened as you can see in the graph, was only a very small increase from 1,3% to 1,55% for a 20 year loan in the first quarter. After that rates stabilized and have even gone down slightly in October to 1,48% as demand for loans has declined slightly year on year.
So despite all the talk of higher interest rates, house buyers now can still benefit from these superb conditions. Even for investment, the moderate yields of rental properties of 3-6% on the French Riviera are interesting if you take into account the lower climatic and geopolitical risks of the region, relative to many other holiday destinations.
Using brokers or banks to find the best deals ?
It is clearly best to check with a broker who has a broader view of the market and also one that deals regularly with clients with the same financial profile as you. If you are a foreign resident buying a second home, contact brokers who deal regularly with foreign residents from your country. We will be pleased to recommend brokers based on your country of residency. Despite rumours to the contrary, certain French banks are still lending to US citizens.
For foreign buyers outside the Euro zone, the last point to watch out is timing when to buy Euros. If you notice currencies evolve within a band over a 12-24 months period, then best is to buy Euros when your foreign currency is near the top of that band. The “oanda” website is convenient for checking FX rates.
Combining these tips, you should get you the best possible budget for your dream property.