House Prices Rise by 1.2% in First Quarter
Friday 30 July 2010
French notaires report house prices increased by an average of 1.2% in the first quarter of 2010, although there were substantial differences across the country.
They also report that sales activity picked up in the quarter, but remaining well below that occurring before the world financial crisis in Autumn 2009.
During 2009, the notaires state the price of houses fell by nearly 5% and that of apartments by 4%.
They consider that, while the level of confidence in the market remains fragile, three factors continue to support a reasonable level of activity in the market place.
These factors are: low interest rates, demographic factors pushing the demand for housing, and confidence in bricks and mortar as a safe form of investment during a difficult period.
This is a view that is also supported by FNAIM, the French estate agents association, in their recent market review, as well as by economic consultants Xerfi in their recent study of the French housing market.
Nevertheless, the notaires argue that there are, and there will continue to be, significant regional variations in prices. While Paris has remained relatively immune from the economic crisis, the situation within the provinces has been a contrasting one.
Over the past year the notaires state that house prices in the Averyon, Corsica and Meuse have increased, but in most areas, notably the Haute Loire, Massif Central, Indre, Moselle, Gers, Saone, Loire and Charente, prices have fallen.
At a city level there remains the same contrast in the market, as the following two tables show. The biggest rise in prices in the last year occurred in Bordeaux (6.1%), while in Grenoble prices fell by 12.1%.
In relation to apartments, the biggest price increase occurred in Montpellier (7.4%), whereas in Tours they fell by nearly 8%.
This article was featured in our Newsletter dated 30/07/2010