Introduction to Investing in France
Investing in France has been xpopular, but following a change of President and a government who has promised to act and get results, to boost the French economy, investment in French property has never been more exciting – or had so many options.
The changes proposed by Nicolas Sarkozy and his government are much needed in France, a country where over 50% rely on rental accommodation as their principal residence and who have grown used to working to the classic 35 hour week, the medical system whilst superb is financially stretched and state pensions are so generous there is little incentive to create supplementary pension schemes.
We believe that investors will continue to look to France for the following reasons:
- A strong demand for long term residential rental accommodation. France has a massive shortage of long-term rental units. This is therefore an interesting investment opportunity for overseas investors as the rental tenancy agreements are very secure and offer protection against rental voids and tenancy disputes, and developments are usually managed by experienced “gestionnaires”.
- An increased desire for property ownership as the concept of a “property ladder” is beginning to emerge in France, with individuals encouraged to get on the French property ladder through increased incomes due to a relaxation of working time legislation market introduced by the government presenting good capital growth opportunities. There are also many financial incentives in the form of special mortgages for first-time buyers, and those who had previously been unable to access their own property.
- Unsurprisingly, a continued demand for tourist accommodation. France is the most popular tourist destination in the world, as figures predict that numbers will grow from 75 million in 2006 to around 106 million by 2020. Government incentives are in place for developers and investors alike to ensure the demand for quality hotel and self-catering accommodation is met.
- A rise in demand for university accommodation (“halls of residence” or “residence étudiants”) as the university and further education systems receive greater investment to encourage school leavers to pursue higher education. This translates into a need for quality student housing, ripe for investment.
- Due to the aging population of France, an increased need for medicalised centres and retirement homes. The government encourages longer term patients to be moved to specialised centres in particular for the elderly, to reduce some of the burden of palliative care on the state. Equally, for many French residents unable to look after themselves or wanting to live in secure communities, a desire for developments catering for this specialist clientele.