House prices rose by an average of 4.2% in Q1/11, but there are signs the market may drift downwards for the rest of the year.

Over the past twelve months, the average increase in house prices was less impressive, at 1.6%.

The table below shows a summary of regional price movements for older houses for the first quarter of 2011, and for the past twelve months.

The figures are those of FNAIM, the national association of French agents, who recently published their latest market report.

As can be seen, there is a great disparity between the regions.

Biggest price rises in the quarter were in Burgundy, Les Pays de la Loire, and Provence-Alpes-Côte d'Azur, whilst in Brittany and Poitou-Charentes prices drifted downwards.

Over the past twelve months prices have risen in 11 regions, and they have fallen in 7.

There are no figures available for departments, but again, there will be substantial variations.

The agents report that 30% of the sales in the South West and the South East were for second homes.

FNAIM forecast that, on average, prices are likely to be relatively stable for the remainder of the year.

Other reports from agents Century 21 and the notaires suggest that the momentum of sales has started to slow. This may be due in part to a toughening of credit conditions, although as most households are on fixed rates, the impact is likely to be limited.

Nevertheless, a slowdown in the market could well lead to a softening in prices. Indeed, in their own review of the market for the first quarter, FNAIM state that, on average, apartment prices fell slightly in the period, although they remain in positive territory over the last twelve months.