The report from the FNAIM (National Association of French Estate Agents) has shown that despite some drops in property prices in certain regions of France, generally speaking, French property prices are stable and the outlook is overwhelmingly positive as we emerge from the 3rd quarter of 2010.
In general the property prices throughout France are stabilizing. In the housing market, the average annual variation in prices, after eight consecutive quarters of being negative is now up by 1.2% in a year. If we look at the figures from the 1st quarter of 2009, where houses prices were at 161.8 (their price index was 100 in 2000), compared with those from 2010, the 3rd quarter of 2010 has seen an increase of 3.23% with figures reaching 167.2.
There has only been a decrease in house prices in 3 out of 20 departments; Lower Normandy, Picardie and Lorraine. In these 3 regions prices have fallen between 2.5 and 6%. The good news is that in Aquitaine, Brittany, Provence-Alpes-Cote-d’Azur and Ile de France, prices are on the increase; in Paris for example, prices increased between 2.5 and 6%, and in every other department prices are remaining stable.
Despite previous predictions earlier this year of a 2-3% decrease in house prices, the FNAIM now believes that by the end of this year when all figures are collated, there will actually be a 2-3% rise in prices. They also report that in accordance with the general trend, sales should increase to 700,000 this year, attaining the level that was reached in 1999. It is evident that the economic situation is much more favorable now for buying than it was in March this year.
This upturn in fortunes for the French property market can be mainly attributed to the fall in French mortgage interest rates. At present they stand at an average of 3.1%, which is the lowest they’ve been for the past fifty years. Furthermore since the market has bottomed in most places, now is the ideal time for buying, especially since January 1st marks the end of tax reliefs and breaks for property purchases and investments. Thus people who have already got the ball rolling in the search for a property will be encouraged to finalize their plans before the end of the year.
In addition property remains one of the best solutions to financing retirement and in France you will find that this is extremely common. The FNAIM report reveals that 61% of French looking to prepare their pensions are investing in properties indicating that the faith of the French in their own property market should provide outsiders with a great deal of reassurance to make good investments.