The economic downturn which affected property prices in many other countries did not have the same impact on France and some areas saw a small rise in property prices. France traditionally has stable property prices and prices fluctuate only with changes in inflation. While property prices increased dramatically in the late 1990s and early 2000s in other countries, the same thing did not occur in France so there is little pressure for prices to fall.

Property in France tends to be seen as a long-term investment. This is mainly because people do not buy expecting property values to soar so that a quick and large profit can be made. Property in France is bought as a home. Purchasing a home is also not a decision that is entered into lightly due to the fees that are involved. Estate agency and notary fees can equal as much as 15% of the final price of the house and if you choose to sell you need to be sure that the house has risen in cost by at least 15% in order to profit. Another reason is that French banks are much more reluctant to lend to buyers and require much more in the way of guarantees than banks in the UK and the US.

Despite the lack of change in property prices, demand for property has slumped a little in recent years as people wait to see what is happening to the markets. France has seen fewer expats move there in the last two or three years and this is also partly due to the substantial change in the exchange rates. For some time the exchange rate has been below €1.20 to the British pound, yet the rate has been as high as €1.50 per British pound, so UK buyers are now getting less for their money. 2010 seemed to mark the start of recovery though, as more property sales were recorded than in the year before. There are a number of reasons for this revival. There are plans for an end to mortgage tax relief and there are increases to capital gains tax due during 2011 which means that those selling second homes will find themselves paying more.

There are a number of certainties when it comes to property prices in France. New-build properties are often more expensive than an older property of similar size and location. The more remote your property the cheaper it is when compared to a similar property in a village, town or city. Larger properties often have a lower value per square metre than a smaller property.

One of the main factors in property price is the location. As with all countries there are areas which are expensive and those which are very cheap. Paris is one of the most expensive regions in France although there are many sought after areas in the country which have high property prices. These include several areas of the south coast and areas around the Alps. House prices in France are also affected by the local amenities, so the further away you are from schools, hospitals and shops the less you have to pay.

Property in rural areas is also affected by any agricultural industry in the region. If you purchase a house close to good wine growing regions and you have land then this automatically adds value to the property.

Average house prices vary across the country and are subject to many changes but for the third quarter of 2010 house prices have been collated for each region. In Alsace the average house price was €220,000 which is high when compared with the €159,000 in neighbouring Lorraine. There was also a different between Lower Normandy, with an average of €157,000, and Upper Normandy at €169,000. In neighbouring Brittany, average prices stood at €171,000. The most expensive region was Provence-Alpes-Cote d’Azur at more than €380,000. The highest average prices were in the Limousin region at just over €115,000. Other low priced regions include Auvergne at €138,000 and Burgundy at just under €150,000. In the Ile de France region the prices were just under €300,000. The properties in the Loire region are very popular with expats and average prices there were just €180,000.