French property market update: January 2017
PUBLISHED: 16:39 02 February 2017 | UPDATED: 10:55 08 February 2017
The positive trends in the French property market are continuing with French property sales up by 9% and prices up by 1.6% and this looks set to continue in 2017 according to the latest official report
The latest property market report from Notaires de France, analysing the French property market in the third quarter of 2016 (August-October), confirms the major trends seen throughout the year – increases in the number of property sales and stable prices.
Number of property sales rose by 9%
There were an estimated 843,000 transactions made in the 12 months to the end of October 2016, representing a year-on-year increase of 9%. The report puts this down to several factors, including attractive interest rates which have increased property buyers’ purchasing power by 29% in the last 8 years. These low rates have enabled many buyers to increase their budget and renewed the interest of first-time buyers.
Property prices up 1.6%
Property prices have continued to rise, following the trends first noted at the start of 2016. Overall property prices rose by 1.6% year-on-year in the third quarter of 2016, house prices rose by 1.8% and apartment prices by 1.3%. This is the third consecutive quarter that property prices in France have increased year-on-year.
House prices up 1.8%
Overall, house prices rose by 1.8% year-on-year in the 12 months to October 2016. House prices in Ile-de-France increased by 1.2% year-on-year to an average of €298,900 while in the rest of France house prices rose by 1.9%. The towns that had the largest year-on-year increase in house prices in the third quarter of 2016 were Caen (15.5%), Chartres (12.2%) and Poitiers (7.1%) while the ones that saw the largest fall in house prices were Châteauroux (-13.4%), Montpellier (-9.9%) and Amiens (-8.8%).
Apartment prices up 1.3%
Overall, apartment prices rose by 1.3% year-on-year in the 12 months to October 2016. This was mostly seen in Ile-de-France where apartment prices rose by 2.6% while in the rest of France apartment prices remained stable. Apartment prices in Paris rose 3.6% year-on-year to an average of €8,300/m². The towns that saw the largest year-on-year increase in apartment prices in the third quarter of 2016 were Bordeaux (9.8%), Nancy (5.6%) and Amiens (5.1%) while those that saw the largest decrease were Poitiers (-5.6%), Mulhouse (-5.2%) and Dijon (-4.6%).
Properties in ski resorts
The report focuses on property sales in the ski resorts of Savoie an dHaute-Savoie in the French Alps and finds that half of the resorts reported rising prices in the 12 months to the end of September 2016 compared to the previous 12 months, while a third of resorts saw their prices decrease. The resorts with the largest increase were Megève (16.4%), Châtel (13.4%) and Samoëns (12.5%) while those with the largest fall were Praz-sur-Arly (-9.9%), Les Gets (-7.3%) and Le Corbier (-6.5%). The most expensive resorts for property were Val-d’Isère (average apartment price of €7,970/m²) and Megève (average apartment price of €7,620/m²). Non-residents accounted for 18% of buyers with the majority of those being English (45%).
Predictions for the French property market in 2017
The Notaires are confident that interest in French property should continue in 2017 and sales volumes will remain high. A return to the exemption of capital gains tax after 15 years’ ownership could dampen price rises, while boosting investment in bricks and mortar would increase the number of buyers and put pressure on prices.
Based on the number of preliminary contracts across France, the price index projection for the end of February 2017 confirms an upward trend. Resale apartments show an increase of 4.5%, revealing prices that haven’t been seen since 2014, while a rise of 5.7% in resale house prices brings values to the same level as in 2012.