The Notaires de France has published the first property sales figures of 2022, covering the first three months of the year (quarter 1).
The data shows that while the volume of sales is still extremely high, the rate has fallen since last year. Property prices are also continuing to rise but the notaires warn of a slowdown in the market in the coming months, linked to inflation.
Here, we pick out five key points from the notaires’ report, which is the fullest property information available as it takes into account all property sales and pre-sales that occur in France rather than data from individual estate agents.
It takes several months to compile, hence why the latest one showing this year’s first quarter has only just been published.
The data looks at sales of ‘non new-build properties’ (logements anciens). France distinguishes between new houses and non new houses, which both have very specific definitions but can generally be thought of as ‘second-hand houses’ (having already been lived in) and new builds.
Read our article showing how property prices around France changed in the first three months of this year in our article here: MAP: French house price rises continue - how is your area faring?
Property sales still high but starting to slow
The notaire’s report warns of a potential slowdown in property sales in the months to come, calling for vigilance.
Overall, 1,182,000 properties changed hands in France (not including Mayotte) in the past year, the latest figures from the end of May this year show. Yearly sales reached over 1.2 million in August 2021.
“This reflects a dynamic start to the year but also reveals something of a high plateau,” the report states.
“The rate of sales is stabilising and could soon give way to a decline.”
Inflation having an impact on house sales
Part of the reason for sales stabilising and potentially decreasing is due to inflation and the number of properties being put up for sale, the notaires point out.
“The supply of properties for sale is slowly dwindling, making it difficult to maintain such high [sales] volumes,” the report states.
“This downturn is directly linked to the rise in inflation, which is affecting the spending power of people in France.”
French inflation was at 5.8% over a year in June, and is expected to reach 6.8% in September.
Diminishing buyer confidence suggests hard times to come
The notaires say that these indications, along with the increasing rate of mortgage refusals in France, mean that the ‘real estate sentiment’ – the confidence levels of people looking to buy property – is dropping.
“Sentiment is down to 2013 levels, almost 2008 levels, which were difficult periods in terms of real estate activity,” the report states.
This could lead to a serious slowdown in the housing market.
Houses outside Ile-de-France see highest price increase
The median price of non new-build houses outside Ile-de-France was 10% higher in the first quarter of 2022 compared to Q1 of 2021.
In general, non new-build houses outside Ile-de-France have increased in price far more than those inside France’s most populous region.
Coastal areas in particular have seen significant rises since the Covid pandemic began and working from home became more widespread.
The median price of non new houses has also risen significantly more than non new flats in the past year in and out of Ile-de-France, as the table below shows.
House price rises to slow down by end of August
Projections based on pre-sale agreements (avant-contrats) suggest that house price rises will continue to slow.
By the end of August, the median price of non new-build properties (houses and flats) in France should be 6.6% higher year-on-year, less than the 7.3% year-on-year gain from Q1 of this year.
Prices of houses are still expected to increase at more than double the rate of flats.