Sales Down, Prices Down…and Falling
Volume XI, Issue 15
Sales are down. In 2012, 709,000 existing homes were sold throughout France — a decrease of 12% over the prior year.
Prices have generally declined in France throughout the year 2012 — with apartments having decreased by 1.1% and house prices 2.1%. This price drop is more acute in the provinces (-1.6% for apartments and for houses) on the Ile de France.
Investors fear a possible toughening of rental regulations with hopes of short-term gains vanishing. For first-time buyers, zero-interest loans are no longer available.
The percentage of transactions by purchasers under 30 years of age decreased in 2012 by 15.8%. The proportion of transactions made by purchasers of foreign nationality has remained stable in France at 5.6% in 2012.
Industry professionals ask themselves how to rebalance the housing market in 2013?
The wait-and-see behavior by both sellers and buyers is justified by the general state of the economy and its prospects in the short term. However, interest rates will not stay low for long. Sellers must adjust their prices to the credit worthiness of the buyers.
This adjustment of market prices of apartments and houses would take hold if we believe the data from the pre-sale contracts anticipate the market by about three months:
– In the provinces, there was a cumulative decline between May 2012 (the highest) and December 2012 in excess of 7%.
– In Paris and environs, the selling price index peaked in August 2012. The average price per square meter of a Parisian apartment was 8,320€ at the end of January 2013. According to the data from the pre-sale contracts in the capital, prices could fall by 4.5% between August 2012 and May 2013.
Editor, French Property Insider & Director of The Adrian Leeds Group, LLC
Email: [email protected]
P.S. My friend and I have decided to proceed on the purchase of the studio apartment in Vieux Nice! If you attend the Living and Investing in France Conference in Nice September 27-29, you’ll be sure to get a tour! We’ll be announcing the details of the conference shortly, so stay tuned! For an advance peak, visit Living and Investing in France.
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