Nicholas Wallwork
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French property market under real pressure
Property prices in France have fallen by an average of 1.3% in the last year with sales also falling and fewer new homes being built, according to the country’s leading estate agent association. The latest figures from government also show that the number of new build property sales in France fell nearly 25% in the third quarter of 2012, there was also a fall of 21% in the number of house building starts and a 6.9% fall in building permits for the same quarter.
Industry association, the Fédération des Promoteurs Immobiliers, said that its members report a 30% fall in the number of new build sales.
Looking at regional property markets, using figures from the FNAIM, the national association of French estate agents, prices are down most in Brittany with a fall of 7.9%, followed by Lower Normandy down 6.9%, Lorraine down 6.7%, Champagne-Ardenne down 5.6% and Upper Normandy down 4.9%. The downward trend is also hitting the traditional hotspot of Languedoc-Roussillon where house prices are down by nearly 3% over a year.
Estate agents said that the residential property industry is suffering from a number of major fiscal changes that have been introduced over the last couple of years, notably the withdrawal of government sponsored interest free loans on existing older property for first time buyers. They also point out that although mortgage rates, at around 3.5%, are now at a near all time low, the banks have toughened their lending criteria and buyers are more cautious. The result is that mortgage lending is down by around 30% in the past year – a record fall.
Notaires have also reported a significant fall in property prices although it is difficult to make comparisons with their figures as they have changed the way they report regional house price trends. They have stopped using the arithmetic ‘mean’ for reporting average price changes and are now using a ‘median’ average. The latest figures show that over a four year period, to the second quarter of 2012, house prices in France have fallen by 3%, although there were significant variations between departments.
Comment from PropertyCommunity.com : “I was looking at buying a small investment in France (looking at cote d’azur/rhone alps ideally) as a first time buyer and was wondering if this is really the best time to buy?”
The largest falls have been in Creuse in the Limousin where they are down 15.7%, prices are down 12.5% in Loir-et-Cher and 11.5% in Moselle. Property values are also down 10.8% in Correze, 10.6% in Tarn, 10.5% in Haut-Rhin, 10.3% in Côtes-d’Armor and Bas-Rhin and have fallen 10% in Haute-Vienne. On a more positive note, those areas that have continued to show positive growth over the past four years are Haut-Garonne, Gironde, Indre, Savoie and Haut-Savoie.
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