France has elected its youngest leader since Napoléon, with a decisive 66% vote. The Macron policy agenda is seen as pro-business and pro-EU, reducing political risk in Europe. En Marche! now has a lot to deliver, five years to get on with solutions to France’s problems and some bold promises to keep. As the euphoria and relief fades, we suspect the focus will move on as reality sets in on the tasks ahead for the new president, not least forming a government and the National Assembly elections coming up on June 11 and 18.
As todays FT points out, “it is a common notion, but wrong, that France is an ailing economy”. The country is close to matching Germany in terms of labour productivity and economic performance since the introduction of the euro. For French asset classes, the outcome draws a line in the sand – the rise of Le Pen and/or Melanchon was the perfect storm that didn’t happen.
Owners and buyers of property in France, and specifically the many who have been sitting on their hands, can feel reassured, the risk of any nasty surprises is significantly reduced. However, there should be no illusions, the reform, pro-business, deficit reduction and lower tax policies will face their challenges along the way. A majority in the lower house will be key.
The HindleBaldock view on this is quite simple. Prime properties, be they on the Côte d’Azur, in Provence or the Alps are a lifestyle choice for many buyers and owners in these regions, the makeup of which is truly international. These desirable parts of the country have stood the test of time through global crises and many a French election. What we do see is the consequences of Brexit creating a two tier market: in some of the top ski resorts, and best locations further south, our markets, the impact has barely been felt; in lesser locations, activity has been subdued, values have declined. Confidence in the French market, which has been muted at best in the last several months, should now return. As with most things in life, it’s easy to find reasons not to do something. If however you have longed for your own corner of France then there are now fewer compelling reasons not to do so.
For HBs Outlook 2017 click here