The French national association of estate agents, FNAIM, recently presented their review of the property market in France for 2010.

Overall, they say the price of older homes rose by an average of 1.3% in the year, while there was a rise of 1.8% in the price of apartments.

The increase last year comes after two successive years when, on average, property prices fell (-3.1% in 2008 and -4.9% in 2009).

The graphic below shows the range of price changes for each region over the past year.

As will be seen, the only regions where there was an unequivocal increase in prices was the Ile de France, Nord Pas de Calais, and Provence-Alpes-Cotes-d’Azur.

By contrast, in Languedoc-Roussillon, Limousin, Basse Normandie and Lorraine prices continued to fall.

Elsewhere the picture was a mixed one, reflecting widespread variation and uncertainty in the state of the market.

A reflection of that lack of clarity is the absence of regional house price figures in the report, as well as a lack of detail on the level of home sales.

Thus, although FNAIM provide information on the average price of apartments in the regions, there is no such analysis for houses, a significant and unusual omission.

What is also unclear is the influence of the substantial double digit increase in property prices in Paris on the calculation of the average national figures. We have been unable to get clarification from FNAIM on this point.

Similarly, although the agents state that house sales are up by around 25% over last year, there is no information on the geographical spread of these sales.

Indeed, there does seem to be some nervousness amongst the agents about the veracity of their figures, probably due to the controversy currently surrounding house price measurements in France.

The whole issue is under the microscope by the government, who are keen to bring a greater degree of transparency and certainty to the issue.

In the next few months, the notaires will also be presenting their review of the market for 2010, and it will be interesting to see what similarities and divergences exist between them and FNAIM.

Outlook

The agents consider that despite a gloomy economic outlook, house prices will continue to rise by between 3% and 6% this year.

Their relative optimism is due to historically low interest rates, the demand for housing, and the availability of interest free mortgages for first time buyers.

Nevertheless, the agents also consider that there continues to be a widespread ‘wait and see’ attitude amongst many buyers and sellers, and that such a perspective is likely to increase with the run up to the presidential elections in 2012.