In spite of the recent slump in the property resale market after the 2007 financial crisis, in the last few months, sales have been starting to increase again. In 2007 annual property sales were 800,000 and then fell to 580,000 in 2009, the lowest levels since 1997.
What are the recent developments on the French real estate market?
For a year and a half, annual sales have been picking up slightly with about 678,000 sales completed last August (over a 12-month running period). The latest figures published by the French Council for the Environment and Sustainable Development (the CGEDD) stress that the annual volume of sales stepped up during the 2nd quarter of 2013, with an increase of the sales of 2.9% compared to March 2013. This is good news for the French real estate market which was struggling until very recently.
A report produced by the French Government also raised the question of the volume of sales per region, which is a significant data when studying current developments on the French real estate market. The results show that the highest property sales are completed in the Rhône-Alpes, Corse and Aquitaine regions; followed by the Midi-Pyrénées, Pays-de-la-Loire and Nord-Pas-de-Calais regions.
Also, between January and August 2013, 123,000 properties were sold in Paris and 550,000 in Province. The Parisian real estate market consistently has a large share of property sales in France.
What about property prices in France?
Property prices skyrocketed between 1998 and 2007, due to the housing bubble in the French and worldwide property market. During that period, the Housing Price Index compared to the household disposable income increased from 0.98 to 1.81. Since then, housing prices have had difficulties stabilising because prices varied so much between 2008 and 2011.
However, since June 2011, it seems that the Housing Price Index for resale properties has been slowly progressing. We can now hope that there will be a certain stability in the French property market in the future. In Paris, the Housing Price Index peaked in 2007, but since 2012, this index has been decreasing more rapidly than over the entire French property market.
In only one year, French property prices decreased by 1.1% on average (-1.2% for apartments and -1% for houses). It is a good time to invest in France, with the best prices on the market we’ve seen for a long time.
What is the trend in the French mortgage market?
Compared to the 1980s and 1990s, interest rates for French mortgages are currently extremely low. The fixed rates increased greatly in 2008, and reached 5.20% for mortgages over 1 year minimum. Nowadays, this rate is at 3.10% on average. This is a historically low level!
In addition, the Euribor 3 months rate has never been so low. In November 2013, this rate reached 0.218% against 5.018% in September 2008. Given that this is taken into account for calculating the variable rates, the latest rates will tend to decrease less.
If you would like more information regarding the French property market evolutions, please do not hesitate to contact us via email at email@example.com or by calling us on 020 7428 4918.