French luxury real estate benefits from threat of Brexit
The high-end real estate market in France may profit from the uncertainty of Britain remaining in the European Union, predicts real estate network Coldwell Banker.
The political and economic uncertainties linked to Britain’s potential exit (Brexit) from the European Union may benefit French luxury property, according to luxury real estate agency Coldwell Banker.
Having already resulted in a sharp decrease in value for the pound following its announcement, the British referendum on staying in or leaving the EU to be held in June may have other unexpected consequences. In the case of an overwhelming pro-Brexit vote, the British property market may suffer a slight slump with high-end investors turning to other countries instead.
According to Coldwell Banker, many high level executives will be tempted to invest in the French market if the British capital ceases to be the financial capital of the European Union. The aim would be to “continue to run their business without having to be subjected to the tariff barriers and regulations imposed on institutions located outside the EU.”
The network cites the Paris market, but also real estate in the Poitou-Charentes region, the Arcachon Basin and the Basque Country as the main potential beneficiaries of the relocation of “thousands of bankers, lawyers and managers of multinational companies.”
“The European capital of new technologies” and highly ranked “in the areas of finance and consulting,” Paris, like Berlin, is well placed to host high-level executives who are seeking to purchase luxury housing.
In February, HSBC announced that if a Brexit were to occur, it would move part of its commercial activities and staff to France.
Individuals may also decide to relocate their property investments to France. “Since the beginning of the year, we have recorded a sharp increase in purchases and requests from French citizens living in London and other parts of Britain who have decided to invest in France, mainly in Paris and the southwest,” says Laurent Demeure, CEO of Coldwell Banker France and Monaco.
British citizens are also anticipating a sharp fall of the pound against the euro in case of a Brexit and are fulfilling their purchasing dreams by buying, often in anticipation of retirement, houses and apartments in southwestern France.
By selling their homes, the British benefit from the strong increase — +25% on average — in property prices between 2012 and 2015. In London, this increase has jumped by over 10% in just one year while prices have stagnated in Paris. The French capital is all the more desirable for buyers expecting prices to go up following the 2017 presidential election.
Photo credit: Wikipedia / Dave Kellam