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Property Prices Across France are Up, but Down Compared to 2010

Volume X, Issue 7

The trend is down on the increase — the same story we reported recently for Paris property prices applies to all of France. The French Property Market Report issued by the Notaires de France in January 2012 reports that 832,000 sales took place in 2011 through September, but that the pace of sales has slowed compared to 2010 from a PLUS of 32% to a PLUS of 13%. They believe this is due to the 2009 benchmark and a “string of lean months.”

The figures have reached the levels during the peak years between 2003 and 2007, but that the trend is headed downward in the Paris region where the figures for August to October 2011 were 6% lower than the same period the previous year and 9% below the 1999 to 2007 average. While Paris and the neighboring communities slowed the most, the number of transactions in the provinces increased 8% in the second and third quarters of 2011 compared to the same periods in 2010 and if the trent continues through fourth quarter, the number of projected sales (880,000) could beat the all time high of 837,000 in May of 2006.

16-2-12 opening chart

Prices are up, too — 6.4% over third quarter 2011 in spite of the slowdown in volume of sales. Apartments prices rose 9%, while homes rose 4.4% over the year. They are calling this a “plateau” — compared to the sharp price increases Paris experienced earlier in the year. In the provinces, price increases were more moderate and the gap between apartment and home prices has not been as wide (4% vs. 3.8%), except in the Provence-Alpes-Côte d’Azur (1.5%) compared to such regions as in Rhône-Alpes and Nord-Pas-de-Calais (0.6%).

16-2-12 avg price apts

16-2-12 avg price houses

The market in the provinces is driven by a few cities where prices are rocketing about 10% annually — Bordeaux, Nante, Nice, Toulon, Rennes. Others are falling, such as in Lille and Tours. In a number of regions, the price indexes are leveling showing signs of a stabilizing market. And buyers are older — the over 60 year-old buyer is gaining prominence.

16-2-12 avg price new

The Notaires de France are predicting that this will not likely be a “memorable year” for resale properties, but that the market will not sink to low point it saw in 2008. Interest rates are still low and banks are still lending, even if tightening their standards. Sales may also hinge on fiscal measures, depending on who wins the upcoming presidential elections. While the report makes no mention of the change in the capital gains tax laws, I personally think this will affect the market in a very negative sense, as fewer properties will be on the market, driving prices higher and reducing the volume of sales.

16-2-12 indexes

The Chambre de Notaire
s view the market in three parts: Paris including the Hauts-de-Seine in the Ile-de-France, the major cities in the provinces and then the rest of France. Paris is predicted to remain strong as investment property, but prices in the provinces are predicted to drop slightly.

To read the report in its entirety…in English!…French Property Market Report.

A bientôt,

adrian charlot 4-12-11Adrian Leeds
Editor, French Property Insider

Email: [email protected]

 

 P.S. Yes, the banks are still lending at low rates. If you’re interested in learning more about how you can qualify for a loan to purchase a property in France, visit French Property Loan or contact us at [email protected]

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