The fall in French house prices slowed in the last quarter, and estate agents forecast prices will stabilise over the remainder of 2009.
In their regular review of the housing market, FNAIM, the French estate agents association, report that house prices fell by 1.3% in the three months ending September 2009 compared with the second quarter. Over the past twelve months, French house prices have therefore fallen by 9.1%. Apartment prices in the quarter fell 0.7%, giving a fall of 7.4% over a year.
In the month of September alone prices actually went up by 0.1%, leading the agents to conclude that there were signs of growing stability in house prices.
They argue that the modest rise in prices may in part be explained by the shortage of properties on the market, as many prospective sellers have decided to hold off putting their property up for sale until the market picks up.
As usual there are big variations across France.
The following table shows those top ten towns where prices have decreased most over the past year.
|French House Prices|
Source: FNAIM October 2009
On a regional basis, prices falls have been greatest South East France, where over the past twelve month period they fell by an average of 16.3%. An analysis by regions of France is shown on the following table.
|Regional House Prices|
|Alsace||2 032||1 956||-3.7|
|Aquitaine||1 902||1 819||-4.4|
|Auvergne||1 615||1 529||-5.3|
|Burgundy||1 681||1 676||-0.3|
|Brittany||1 990||1 987||-0.2|
|Centre||1 737||1 538||-11.5|
|Champagne-Ardennes||1 610||1 553||-3.5|
|Franche-Comté||1 571||1 499||-4.6|
|Ile de France||3 083||2 789||-9.5|
|Lower-Normandy||1 708||1 500||-12.1|
|Upper-Normandy||1 954||1 843||-5.7|
|Languedoc-Roussillon||2 313||1 946||-15.9|
|Limousin||1 486||1 365||-8.1|
|Midi-Pyrenees||1 730||1 619||-6.4|
|Nord-Pas de Calais||1 957||1 869||-4.5|
|Pays-de-Loire||1 924||1 763||-8.4|
|Picardy||1 951||1 766||-9.5|
|Poitou-Charentes||1 656||1 381||-16.6|
|Provence Alps Cote d'Azur||3 503||2 919||-16.7|
|Rhône-Alpes||2 348||2 156||-8.2|
Source: FNAIM October 2009
There continues to be controversy over the FNAIM figures, with some commentators arguing that FNAIM have been playing down the extent of the fall in house prices. The association defend their analysis by reminding us they did argue earlier this year that prices remained too high, and that there was the need for a 'purge' in the price of property, in order that the market could regain its colours. Each month FNAIM analyse around 5000 sales, representing 12% of the total market.
There is some backing for the FNAIM perspective from the Syndicat National des Professionnels Immobiliers (SNPI), a rival association of French agents, who do consider that buyer interest in the French housing market has risen since the summer, although they anticipate no major recovery until the second half of 2010.
The national estate agents group Century 21 also report an increase of 14% in the number of sales in the third quarter over the same period in 2008. Although house prices remain down on those recorded in the same period in 2008, on average Century 21 report that prices in the quarter remained stable. As usual, however, there were significant regional variations. House prices falls were recorded in Languedoc Roussillon, Limousin, Aquitaine, and Brittany, while there were notable increases in the quarter in Provence Cotes d'Azur and Poitou Charentes, both regions that have recorded a significant reduction in prices in previous months.
Orpi, another large group of estate agents, also recently reported renewed interest in the market, mainly due they say to average price falls of around 20% over the past two years.
Similarly, the Guy Hoquet national chain of agents has also reported an increase in sales of 12% in September over the same period last year, although in most areas prices were still on a small downward trend.
The FNAIM third quarter figures are also broadly in line with the trend reported recently by the Chambres des Notaires, who consider that property prices fell by 2.3% in the second quarter, following a fall of 3.8% in the first quarter.
Given the current weakness of the French economy FNAIM remain prudent on the outlook. An opinion poll they carried out as part of their quarterly review showed that only 12% of households had an intention to buy within the next three years, although 39% considered now was a good time to buy a property.
Respondents cited continuing difficulties in obtaining a mortgage due to the level of the deposit required, and that mortgage interest rates were still too high, despite having dropped significantly over the past few months. A majority also considered that their income had gone down in the past year and that they remained concerned about the economic outlook.