Four factors that can lower the value of french property

LOCATION AND ENERGY EFFICIENCY CAN IMPACT PROPERTY PRICES SIGNIFICANTLY France’s property market is facing a difficult period with falling house prices and sales numbers continuing well into

2024. In addition the number of new-builds is falling, thought due to rising construction costs. Read more: Thousands of jobs lost as new building permits plummet in France Something that

both older and new build properties have in common however is a wave of factors that may be impacting their overall value, factors not directly linked to the market itself. Locations that

were previously favourable may now be less so and face higher insurance costs. They may also be prime spots for renewable energy sources and affect landscapes that were previously a draw for

the property.  New regulations aimed at combating energy inefficiency can also affect prices, with the worst-performing properties requiring renovation work in the coming years. This can

reduce potential asking prices by thousands.  We review factors which can affect property prices COASTAL LOCATION Whilst a coastal property has traditionally been – and still remains –

sought after, the risk of erosion means those closest to the shoreline are more at risk. Read more: Coastal erosion: Hundreds of French homes risk becoming uninhabitable However coastal

areas which are susceptible to flooding have seen activity levels remain high – due to the bonus of their sea views – even as the risk of severe floods increase each year. Around 15,000

properties sold between mid-2016 and mid-2021 will be flooded before the middle of the century, according to a study by French company Callendar.  The risks of this may not yet have been

fully taken into account by the market, with coastal property prices having risen by more than 10% in the last few years in some areas.  This is a slow-burning factor, that whilst not

immediately noticeable, is worth taking into consideration as the ecological landscape changes.  RENEWABLE ENERGY ‘EYESORES’  Devices that attempt to help reduce France’s ecological

footprint are already negatively affecting property values.  The presence of a wind turbine less than 5km from a property can see its price drop by 1.5% per m², according to the Agence de la

Transition Ecologique (Ademe).  When situated next to a wind turbine farm, prices can fall by between 20% and 30%.  Director of Ademe David Marchal however disputed that price drops were

this severe in a 2022 interview with Les Echos. DROUGHTS CAUSING CRACKS  Another location-related issue is the increasing number of properties affected by clay shrinkage.  Millions of homes

are affected by this phenomena, which is caused by clay soils shrinking in times of drought, and then rapidly expanding when rainfall returns.  Shrinkage can damage walls, leading to large

cracks, or even damage to the structural foundations of a home.  As droughts become more frequent in France the problem is exacerbating year on year. Many areas across France are affected

although this is particularly noticeable in the south-west and central parts of the country.  Not only can the presence of cracks negatively affect a home’s sale price – with the implication

of potential future issues – it will also be more expensive to insure.  This in turn will cause buyers to demand lower prices to compensate for increased construction costs. Read more:

Second-home owners in France could soon face insurance surcharge NEW ENERGY AUDITS A property’s energy efficiency can lower its value and it is now easier to see those homes are the most

inefficient with the diagnostic de performance énergétique (DPE), or energy audit. These audits, which are needed when selling, renting, and even renovating properties (although in some

cases there are exceptions), provide a quick overview of how efficient a home is at retaining heat in the winter, or letting it escape in the summer, for example. Properties at the lowest

‘F’ and ‘G’ rating levels have seen their value fall by around 10% since 2023 according to property market site Se Loger, and more than 12% in some areas.  This is particularly the case for

older homes which tend to perform poorly in the audits.  Owners are faced with a choice of either reducing the asking price or renovating the property to increase its score.  Read more:

Explainer: DPE survey and new energy audit for properties in France