French property market holds steady
This article takes a look at the property market both in Paris and across the regions at the end of July 2018. The information is the most comprehensible available as it comes from the Notaires de France, who handle every purchase in France. Here the term ‘older’ homes refers to ones built more than five years ago.
A dip in the number of properties up for sale in recent months has prompted reports of a reversal of fortunes to the recovering French property market.
But the Notaires de France insist there is no cause for concern, with figures up to the end of July 2018 showing 950,000 sales completed in 12 months.
Overall, the trend remains positive with sales volumes in 2018 returning to levels last seen in the early 2000s, amid growing confidence in the strength of the economy.
“The trend remains positive. Just because each new quarter no longer beats the previous one in terms of the number of sales, it does not mean the situation is weak,” the Notaires de France add. “A few years ago, the announcement of a volume of “only” 950,000 sales over a year would have caused collective euphoria.”
In terms of prices, steady rises have continued with mid-market prices for older homes up 2.8% on average in the regions, a figure pulled up by the rise in flat prices (+3.3%) compared to houses (+2.5%). Pre-purchase agreements for November indicate a further increase year-on-year (3.9% for flats and 3.3% for houses). The Notaires de France, however, say regional variations are likely to become more noticeable in the future.
Paris property prices rose 3% in the period from August to November 2018 alone, with the annual increase looking set to hold steady at a predicted 6%.
In the wider Ile-de-France region, prices rose 2.5% in the same three month period, a year-on-year increase of 5%. This was boosted by the price of apartments (+5.6% average increase for apartments while houses in the region are expected to see annual increases of about 4%).
Further afield, trends are, in general, in line with the national picture, with a 2.8% increase in the price of apartments and a 3.2% rise in the price of houses compared to the same time in 2017.
Here, prospective buyers will see the greatest regional fluctuations. In the larger cities, prices of apartments are expected to continue to rise by between 5% and 10% in Rennes, Bordeaux, Nantes and Lyon – while remaining stable in Montpellier and Toulouse, and falling in Grenoble.
With regard to houses, prices in and around Nantes, Marseille, Bordeaux and Lille are expected to continue rising. In Toulouse and Lyon, they are expected to stabilise.
The Notaires’ market report adds that it is not only market conditions that are influencing property prices but also political decisions concerning the housing industry, as well as taxation and the potential impact of new ‘ELAN’ law.
This is France’s Evolution of Housing, Planning and Digital Development Law, adopted by parliament on October 16. Its 80 or so regulatory measures will bring reforms to both the social housing sector and urban planning and development issues, as well as the revitalisation of city centres and high speed internet access.
Further evidence of French property market stabilisation came from a Banque de France study for August 2018 which said that 85% of banks in France report the number of people taking out mortgages remains constant.