French Property Market Report - April 09
Wednesday 15 April 2009
With a continuing fall in house prices and interest rates in France, French estate agents are reporting some signs of recovery in the market.
In their latest housing market report, the French estate agents association FNAIM report that house prices fell by 1.7% in the first quarter of the year.
House prices are now 11.2% lower than they were 12 months ago, whilst the price of apartments has dropped by 8.4%.
The result is that house prices are now the lowest they have been since the end of 2004.
On a regional basis, the South East has seen an overall price fall of 13.3%, whilst double figure average price falls have also occurred in the Ile de France, where they are down by 11.2% compared with the same period in 2008.
The movement in houses and apartments per region over the past 12 months is shown on the following table.
| Apartments | Houses | Overall | |
|---|---|---|---|
| West | -5.5 | -8.9 | -7.7 |
| Ile de France | -9.4 | -14.5 | -11.2 |
| North and East | -1.2 | -8.6 | -6.1 |
| South West | -2.3 | -8.7 | -6.4 |
| Centre and Alps | -7.4 | -10.1 | -8.8 |
| South East | -12.7 | -14 | -13.3 |
| Average | -8.4 | -11.2 | -9.8 |
Source: FNAIM April 2009
The following table shows the current average per m2 price of a house in each administrative region of France. The figures should be used as a general guide only.
| Region | Price €/m2 | Region | Price €/m2 |
|---|---|---|---|
| Alsace | 1,997 | Aquitaine | 1,812 |
| Auvergne | 1,534 | Brittany | 1,975 |
| Burgundy | 1,705 | Centre | 1,622 |
| Champagne-Ardenne | 1,573 | Franche-Comté | 1,527 |
| Ile de France | 2,872 | Languedoc Roussillon | 2,058 |
| Limousin | 1,448 | Lorraine | 1,670 |
| Lower-Normandy | 1,577 | Midi Pyrenees | 1,614 |
| Nord Pas de Calais | 1,961 | Pays de la Loire | 1,827 |
| Picardy | 1,876 | Poitou-Charentes | 1,448 |
| Provence Alpes Cote d'Azur | 3,226 | Rhone Alpes | 2,235 |
| Upper-Normandy | 1,918 |
Source: FNAIM April 2009
Within the regions there are some substantial variations in the movement in apartment prices between the main cities and towns. Thus, the largest average falls in apartment prices in the past year have been at Toulon (-19.3%), whilst others who have experienced double digit falls have been Cannes (-13.7%), Grenoble (-11.7%) and Aix en Provence (-10.7%).
Conversely, some towns have seen a small upward movement in the price of apartments, notably at Nancy (4.5%), Narbonne (4.4%) and Bordeaux (2.9%).
No figures are available for the movement in house prices in the major towns and cities.
However, it is the slowdown in the number of sales that made the headlines in the French press this month, with FNAIM reporting a 25% fall since the beginning of the year, compared with the same period in 2008. The fall in prices seems to have been less spectacular. Indeed, somewhat bizarrely, FNAIM report house prices actually increased slightly in January, although they then dropped back during February and March.
Nevertheless, FNAIM continue to believe that prices are still on a downward trend, mainly because of a continuing lack of confidence caused by the wider economic outlook. As a result, they forecast that during 2009 prices may fall by between 5%-10%.
Whilst the agents remain cautious, they are repporting some signs of recovery, with buyers more numerous at this time than in the last quarter of 2008, and with a majority of sellers now accepting that they will need to be prepared to negotiate on the price. Interest rates in France are also dropping quite sharply, so house purchase has become affordable for a larger number of potential buyers.
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