Americans bucked the trend last year as the number of US second-home buyers held up – with Occitanie proving to be a new hotspot.
In general, 2023 saw the French property market contract as the number of sales fell by 21%, linked to inflation, geopolitical tension and rising mortgage rates, but sales in Occitanie to US tax residents rose 39% compared to 2022.
Occitanie was also popular with UK-based buyers, representing 15% of their purchases in France (up from 14%), second after Nouvelle-Aquitaine (stable at 39%). Third was Auvergne-Rhône-Alpes (stable, 11%).
In 2023, the average purchase for UK tax residents was €303,300 and €572,700 for Americans.
Foreign non-residents in general paid an average €363,000, compared to €230,000 for residents of France.
The survey was published by CCF bank and uses notaire data.
Foreign people living abroad
It shows that sales of second homes to foreign people living abroad held up better than the domestic market and fell ‘only’ 14%. Sales to foreign citizens who live in France dropped 16%.
CCF’s Audrey Fauvette said foreign buyers of second homes often buy with cash or smaller mortgages so are not as affected by fluctuations in rates and the economy. Their purchase is often a coup de coeur rather than a necessity.
In terms of nationalities buying second homes from abroad, Belgians topped the list for the third year running, followed by Britons and then Germans, Dutch, Swiss and Americans.
Ms Fauvette said Belgians like France because of the language, cultural similarities and proximity – but their top place was more due to fewer purchases by Britons post-Brexit than a rise in Belgians.
“Britons’ position started dropping after Brexit, especially for second homes. However, post-2016 we saw an increase in purchases by Britons wanting a main home.”
This effect had somewhat died down but it was possible the French government could help with new laws on easier visa rules, she said.
No reduction in Americans
Americans were the only nationality that saw no reduction in the number of second-home purchases in 2023, although the average value of their homes fell 12%.
In comparison, purchases by UK tax residents dropped 20% in number and 28% in value.
Areas with the largest drops include Provence-Alpes-Côtes d’Azur (down 30%) and Auvergne-Rhône-Alpes (25%).
Sales to US tax residents were down 3% in Ile-de-France and 9% in Paca, but increased 39% in Occitanie. Ms Fauvette said these figures hid variations: around €700,000 for ski chalets, but €100-150,000 for Britons buying holiday properties they can visit via Eurotunnel.
High values for Americans are partly linked to purchases in Paris, sometimes due to their work headquarters being there.
“With Americans, Ile-de-France and Paca are still in first and second position, but then it’s Occitanie," she said.
“It’s the only one on the podium that didn’t lose out in numbers of sales. On the contrary, it saw a big rise” she said. “Because of the more difficult financing conditions, the clientele has tended to look at regions where prices are lower.
“Americans continue to climb up the tables year by year.”
Britons historic top buyers
It is also common for non-resident property owners to become residents in the future.
Americans remain, however, significantly lower in number compared to Britons and Belgians for purchases by residents.
Britons in 2023 were, for historical reasons, still the top nationality for purchases by foreign resident buyers.
The figures for this category, which exclude Ile-de-France, show Belgians and Italians came next.
She said the latest news from contacts among mortgage brokers and estate agents is that Paca and the Alps are especially popular with Americans buying second homes.
CCF mortgages
Asked about CCF mortgages for foreign buyers, she said they have a dedicated English-language service for this.
However, the UK’s post-Brexit rules mean that, as CCF is not regulated by Britain’s FCA, UK residents can only have a CCF mortgage for buy-to-let or a main home. Loans to buy a second home are now restricted to ‘high net-worth’ purchasers.
