Negotiation margins in France at their lowest since 2010

The average margin for negotiation on properties in France is at its lowest point since 2010. Indeed, prices are stable and properties are increasingly selling at or near their asking prices.

The LPI-SeLoger barometer illustrates the downward trend of real estate negotiation margins since early 2016. There are currently few chances that one can get a property for less than advertised. At an average of 4.3% (5% for houses and 3.7% for apartments), the negotiation margins haven’t been so low since 2010.

A sellers market in France?

The Rhône-Alpes region takes the crown, with only a 2.4% margin of negotiation. From Chambéry to Grenoble, the difference between the advertised price and the signing price of a house or apartment peaks at an average of 2.4% and 3.6% respectively. The same goes for the Midi-Pyrénées (3% for houses / 3.4% for apartments) and Île-de-France (4.5% for houses / 2.7% for apartments). The market began picking up speed in June 2015; consequently regions with the highest demand tend to have the smallest negotiation margins – including Paris.

A few exceptions

Although overall negotiation margins have narrowed, it is interesting to note that in some regions they remain high. This is particularly the case in Nord-Pas-de-Calais, where the average margin is at 5.4% for houses and 10.4% for apartments. Brittany also maintained high negotiation margins (7.5% for both houses and apartments).

How does negotiating a price work in France?

Gazumping, a common practice in the UK – and increasingly common in parts of the US, where it is known as a “bidding war” – does not exist in France except in cases where a property is for sale by owner.  Common tactics like “low balling” the price are generally spectacularly unsuccessful in France as the owner is likely to be insulted and to conclude the buyer is not serious.  Similarly, acting disinterested is also generally an unsuccessful tactic; sellers can sometimes choose a lower bidder over a higher bidder because they feel a kinship with them and want them to ‘win’ the property.  Paris Property Group is the ideal partner for help negotiating a property purchase and identifying all the potential landmines.

Contact us for assistance with buying or selling property in France.

Sources:  Seloger and Les Echos