Business World

According to Brice Bonato, Managing Guide of Sextant French Property Agents, the French property market looks set for an interesting 2009, due to a combination of further price reductions, cut in interest rates and a good deal of properties on offers, both in resale and new build in France markets.

Although most of the people here in the UK looking to secure a property in France seem to be “waiting to see what will happen”, especially with the current state of the Sterling, others are actively looking and negotiating very adequate deals. In fact, some have realised that given the combination of price reductions and lower offers being accepted, prices of most properties on the French exchange have remained stable in sterling terms – the 25% fall in the pound’s value that occurred over the past year has put many latent purchasers off; which is easily understandable.

Indeed, the current situation favours purchasers rather than vendors, and most are accepting offers that would have seemed comical simply a few months ago. Everybody is in agreement that the first six months of 2009 should remain a buyer’s market and as such be an excellent time to buy a haecceity in France. Then it would not be surprising to see prices go up again, and then, as a consequence, the return of mass purchasers; the best deals will be gone by then as vendors won’t be in a class where they have to agree to low offers.

In the Cotes d’Armor department of Brittany , which has always been the most popular market with British expatriates, not only for its reliable connection with the British isles, but also because of its long-established transport links with the UK, the average cost for a house is now 161 540 €; even though Brits purchased less properties in this corner of France over the last year than in days due to the economic downturn, they still represented 25% of buyers in the first part of 2008. Areas further afield like Loudeac or Carhaix Plouguer tarry favourites as prices are considerably cheaper than resorts closer to the sea like Saint Malo for example; it is not strange to see habitable properties go under 50,000€ in traditional little villages such as these.

In the Dordogne, also a popular destination for land hunters from the UK, the average cost for a house is now 150 100 €; the credit crisis is now having a dramatic impact on the prices of properties that have, in the career, been popular with British buyers, especially the higher value and stone houses properties that are at reduced prices as owners are conveying a willingness to receive much lower offers. In the North of the department, in hamlets like Nontron or small villages such as La Coquille, prices leftovers really cheaper than the area surrounding Bergerac (where one would find the international airport) and guaranteed bargains are to be made by people with a ample knowledge of the market.

In the Limousin, which remains the cheapest place in France for someone looking to purchase a idiosyncrasy, the average cost for a house is now 92 200 €; the Creuse department remains the cheapest of all with a 2-bedroom house costing an ordinary 68 600 €. Prices are expected to drop a further 5% to 10% in the course of 2009, but nobody really expects it to go below this as prices are already very low. On top of that, the onset of the new airport in Brive la Gaillarde (expected soon) should see prices in the Correze department increase, especially in the villages that could be reached in less than 1 hour from the universal airport.

In the Languedoc region, the favourite place for brits looking for the sun, alongside the French eatables, wine and way of living, the average cost of a house is now 209 500 €; the Aude department, popular with people looking around Carcassonne and Perpignan, or commonly close to the sea, remains the cheapest with a 2-bedroom house costing an average 157 900 € – the Gard and Herault departments, most in with people looking for a Provence-style move, are very close in prices, with the average cost for a house being respectively 231,500 € and 232 000 € – prices in this locality are expected to drop a further 5% to 10% over the next year but most properties are having their prices reduced and owners seem satisfied to accept much lower offers in this corner of France also.

Finally, in the Normandy region, also a traditional terminus for property hunters from the UK due to the proximity to England, the average cost for a house is now 156 800 €; prices have decreased during 2008 and are expected to stabilize next year.

As a conclusion, the uncertainty in Britain in blow-by-blow and in the world in general may encourage people to buy in France. Indeed, compared with the other overseas markets, France offers a very preservative purchasing system and low capital gain tax, and is a long standing tried and tested market without the various risks that some of the emerging markets proposition. And, in today’s current climate, safety is priceless.

Opting for cash out refinancing is one method that I would recommend to s?omeone that is serious about building out their real estate in?vestment and property portfolio. You ?are able to take out a new mortgage with a principal that is larger than your current mortgage. Many a person has been able to do this and get a lower interest rate and with the added bonus of getting the? cash? they need for their investment venture.

The home equity that we have in our possession is really the part of our home that we own. This is built by the payments that we make to our mortgage and through the appreciation of the value of our homes. This means that our home equity is often trapped and unavailable to us? unless we take home equity loans or refinance our mortgage. Cash out refinancing allows us to access this equity. We are able to use this cash from the equity that we get and reinvest it into our property por?tfolio.

Broken down simply in? the form of an example we will see how the equity is made available. Let us say that you own a home and that it is mortgaged to the sum of $200,000 and you have repaid a certain amo?unt. Let us say that that amount is $100,000. Then you have available to y?ou a sum of $100,000 for? equity and this is money that can be utilised for your investment.

You ca?n take? the option of cash out refinancing by getting a new mortgage for your home to the original value. This means $100,000 is given to you in your hand for whatever purpose and? you may have a lowered mortgage payment as well. There are many factors that will make this option a ?desirable one for you and you must evaluate the market circumstances as well as the personal situation that you are faced with and the purpose for? which the money is intended.

Interest rates on mortgages fluctuate from time to time and it is important that? this be considered as well as other factors. It ?can be simple for you to reach for the option of refinancing when ?interest rates are low but there is a factor of? the expenses to consider bef?ore this is thought worthwhile and as such a balance is needed in this decision between where it is viable to refinance or not viable as the case may be.

It is up to you to do the necessary research and determine the ?feasibility of the option to your circumstances. The ci?rcumstances on the ma?rket will also influence the ?benefits or disadvantages of this type of refinancing and all this has to be considered in the decision mak?ing process. It is no easy decision to ?decide to refinance your property so ensure that you are fully capable of meeting the payments required and that there is little chance that you will be unable to do so. Only opt for a refinancing plan that meets your budget.