In the 12 months to January 2018, notaires signed off on 969,000 property transactions. A month later – the latest for which figures are available – that year-on-year figure had dropped slightly to 965,000.
Both figures remain well above the 834,000 transactions recorded at the last peak in 2012 and are much higher than the low of 564,000 in 2009.
Notaires de France say the reasons for the increased volume of sales are well known – low mortgage rates, longer loan terms, targeted tax incentives, overall reasonable prices outside Paris and a larger stock of transferable properties.
However, the early 2018 figures show transactions fell slightly – suggesting the peak of those wanting to take advantage of the favourable conditions had been reached – and 42% of banks reported a fall in the mortgage applications.
Notaires are now predicting a ‘soft landing’, suggesting more reasonable volumes for 2018 with prices, generally, steady.
Intriguingly, there has been a rise in the number of over-60s buyers in the past 10 years. In 2017 these ‘seniors’ made up 17.8% of all property purchases, compared to 13% in 2007.
This has been linked to longer life expectancy and the baby boom generation’s growing age, as their proportion of the overall population rises.
Nice notaire Laurent Rose pointed to “an ageing population, longer life spans, and people remaining economically active longer, but there is also a corresponding drop in the numbers of young buyers, with under-25s buying a quarter fewer properties.
“Slight changes effect this market very rapidly: a difference of €50 a month, for example, can be huge when you are starting out, and with uncertainty on the level of government aid for young buyers they are buying less. Parents and grandparents also have less spare cash to help them out.”
The over-60s buy more flats than houses and made up more than a fifth (21.6%) of apartment purchases in 2017.
One point to note for older buyers is that mortgage insurance is often a ‘brake’ on property purchases, with premiums costing up to double what a younger borrower would pay.
Year on year, average property prices continued to rise: +3.4% in the fourth quarter of 2017 compared with the same quarter of 2016. The figure was +3.3% for the year leading up to the third quarter.
The rise was most noticeable in older flats (+4.5%) where the trend remained better than in houses (+2.6%).
Increases vary enormously across the country with the highest for older houses being in major urban centres. The biggest rise in the last quarter of 2017 from the previous year was in Bordeaux (+14.1%), followed by Saint-Nazaire (+12.3%) and Nantes (+11.1%). In Lyon and Marseille prices remained stable – while Nice was the exception as prices fell by 3.6%.
Prices for older flats were stable or rising. Bordeaux once again saw the biggest hike (+16%), with €3,930 the average price per square metre.
In Nantes, Annecy, Lyon, Lille and Toulouse, prices rose between 5% and 8%, while they were relatively stable in Grenoble, Dijon, Nice, Montpellier and Tours. Prices for flats fell 4% in Saint-Etienne.
Where prices rose sharply as demand outstripped supply, it was a seller’s market, and they benefited from low bank interest rates (for buyers) in 2017.
At the end of May the expected trend, based on pre-contracts throughout mainland France, was for prices to continue to rise, but less sharply than in 2017. This will be around +4% per year for flats and +2.2% for older houses.
At the same time, the proportion bought by the under 40s has dropped by -1.5% for those below the age of 30 and -2.8% for 30-39 year olds.
This last age group makes up almost one in three of all buyers.
