Rents Show Modest Rises

A recent review of the residential rental market by FNAIM, the professional body of French estate agents, showed that rental levels of flats went up by 4% in 2005, whilst rents for houses remained stagnant. Opinion is divided on the outlook, but most suggest that, at best, the market will remain stable.

This trend has continued through into 2006, with rental levels for flats increasing by 4.4% and those for houses standing still.

Over the past 5 years, rents for flats have shown an average annual progression of 4.6%, whilst houses have gone up by 3% per year.

The survey concerned those properties let on an annual basis, rather than those for holiday lettings.

The average rent for a flat is now €12.10 per square metre and €8.30 per square metre for a house.

Needless to say, these national figures hide significant regional disparities and differences between size and type of property.

The biggest price rises this year have been in the South East (8.4%) and in Normandie (8.4%), whilst rents in Poitou-Charentes have actually gone down by 1.8%.

The rises have also been higher for smaller properties, than for larger homes.

Average rents for a flat in Paris are €21/m2, whilst in the South West it is €9.40/m2. In the South East the figure is €11.80/m2.

In a review of the Paris market, agents report that the demand for furnished accommodation in particular, has dropped, due primarily to a lower demand from the international clients.

They also state it is becoming increasingly difficult to let such properties because of the strength of the rental guarantee being sought by landlords and banks.

In terms of outlook, opinion is evenly divided, with as many agents considering that the market will show no rise or actually fall, as those who consider rents will show further increases this year.

In particular, whilst rental levels for flats may progress at a more modest rate, those for houses will show no improvement.

One of the major factors leading to a slow down is the net surplus of available properties over the level of demand.

As a general rule, property in the major city centres shows the best growth prospects.

If you want to know more then visit FNAIM Rental Survey