Assetz® News - Snow end to French possibilities

Snow end to French possibilities

6th January 2009 |

In recent weeks, there has been much talk of the demise - if only for now - of UK investment in eurozone properties. This is not because the Alps have vanished, the Cote D'Azur suddenly has poor beaches or because the food has suddenly become inedible, but because of the value of the pound against the euro.

With the two currencies nearing parity, it may have been easy to nod in agreement with the rationale that now is not the time to time to consider that continental purchase. Time, it might seem, to put off dreams of investing in France for another year.

However, to make such an assumption may be to commit a significant error, for a number of good reasons may be stated in favour of investing in France soon.

Firstly, the last few days have seen the pound move away from parity with the euro as it has been the continental currency suffering from the latest economic news. In particular, the lower than anticipated level of eurozone inflation has led to heightened expectations of a cut in interest rates by the European Central Bank this month. Therefore, the exchange rate argument is losing strength and may go on doing so.

Furthermore, there are some specific areas of France where a range of circumstances are bringing surprising benefits. One example is that of the ski areas, where the Christmas and New Year season has brought not just good snow levels but high tourist levels, with a 75 per cent level of occupation in the Alps, Pyrenees and other resort areas.

This was revealed in a report by market analyst firm Protourisme, which noted that it has been the domestic market that has boosted the resorts. Describing the figures as "excellent", manager Didier Arino observed: "The economic crisis is helping French vacation spots. The French are not going abroad as much."

While there may seem a tinge of irony in this, there may also be opportunities for investors, as a bolstered domestic ski tourism market could mean more demand for buy-to-let accommodation in such areas.

Then there is the question of availability. US current affairs magazine Newsweek said that there are far greater prospects for buyers in areas such as Verbier and the French Riviera. Chief executive of Sotheby's International Realty in France Alexander Kraft stated: "There are more properties coming onto the market than we have seen for a very long time and there are great deals to be had."

Even the much-feared end of cheap travel after budget travel firm XL went bust has not materialised. As with any recession, some well-known firms will fall but those with strong foundations will survive. Among low-cost airlines, the competition remains and one of them, Jet 2, recently provided the latest example of how new deals can still help investors and tourists get to France cheaply by offering one-way trips to Toulouse for as little as £29.99.

So while some may be willing only to see doom and gloom, those who look a little further may see plenty of signs that the French market still has much to offer.