Before we get started with the state of property in France in 2016, we would like to wish our readers, our customers and all lovers of France a very happy new year. 2016 was a year of many records on the property front and we will cover these in details below. In any case, if you have forthcoming or ongoing projects in 2017, we hope they are met with success!
This won’t be news to you if you are following our blog already. We have indeed covered the topic of low interest rates for French mortgages many times last year, they were historic lows! So this won’t be a surprise either if we tell you that 2016 so a new record of property transactions in the last 20 years. We expect around 860,000 sales based on estimates from real estate agencies. This also echoes what French notaries had flagged in their latest update last year. They will soon release the actual 2016 figures on their website. No doubt we will relay!
2016: a year of new records
860,000 properties found new owners! Well, credit rates in France have never been so low for a start. We wrote extensively about this last year. That was a real driver for the property market in France last year. On average, mortgages were granted at a low-low rate of 1.6%. The nationwide average over the last 20 years was 2.1% which is quite low across Europe already. On average homeowners in France owe back 47k Euros to their creditors. Compared to Britain, borrowers still have to pay back 85k Euros. This is the highest figure across Europe.
2017: presidential election looms
One of these years in France, a new president will take the reigns of the country in Spring. Presidential hopefuls always send signals to voters as early as possible. Especially with property taxation. François Fillon for example is the official candidate for the opposition party, The Republicans and he has already made it clear that there will be less taxation on benefits from property selling. This would trigger owners to sell again as the duration of taxation would be shortened by 7 years from 22 to 15. Again this is an example but one that will create caution in France. Because the ruling party have not selected their official candidate yet, we will publish an update when done just to remain objectives. We will also include all other candidates who have a chance to make it to the second round as well. French people tend to hold off during such years, a good time for foreign investors to make a move!
What about prices?
Well, again, price increase in France is quite low compared to other countries in Europe. Only 2% between 2006 and 2015. If you compare with Britain, do you really want to? Same period: +30%.
Of course prices vary between regions and areas, so we wanted to give you for last year across all cities of average and important sizes in France. If they are close to local airports that you use, please let us know in comments, this is always useful information to help us serve you better.
Here is the breakdown:
Prices did not really vary in places like Toulouse, Toulon, Grenoble, Strasbourg, Le Havre, Rennes and Dijon. There even was a drop in areas like Angers, Montpellier, Nice and Saint-Etienne. Are these sweet spots for you? 2017 could be your year then!