The average price per square meter of residential property in France fell by 1.8% in 2013 and this year the prospect of rising interest rates could hit the real estate market further.

Average property prices in France down almost percent 2 in 2013 but sales increased!

The average price per square meter of residential property in France fell by 1.8% in 2013 and this year the prospect of rising interest rates could hit the real estate market further.

The figures from Century 21 shows that year on year prices fell in some regions and increased in others but overall the firms says that record low interest rates supported prices and sales.

This follows a fall of 1.9% in 2012 and means that prices are around the same as they were in 2010, according to Century 21. Another leading chain, Guy Hoquet, said average prices per square meter fell 1.6% nationally in 2013.

The figures from Century 21 show that the steepest fall in prices was in Pays de la Loire with a fall of 7.8%, followed closely by Franche-Comte with a fall of 7.7% and then by Lower Normandy where prices were down 6.4% year on year. In neighbouring Upper Normandy they fell 5.8%.

Prices fell 3.8% in Brittany, Centre, and Provence-Alpes-Cote d’Azur. In Bourgogne prices were down 4.3%, in Midi Pyrenees 3% and in Champagne-Ardenne and Poitou Charente there was a fall of 2.7%.

A number of regions saw smaller falls including Languedoc Roussillon down 2%, Lorraine down 1.2%, and Nord-Picardie down 0.4%.

The Limousin led the price rise with a positive 7.6% but the region has some of the lowest prices in France, while Aquitaine saw a rise of 5.1%. Elsewhere the prices rises were more modest, up 0.5% in Alsace and the Auvergne and a rise of 0.3% in Rhone-Alps.

 

Ile de France and Paris largely saw prices fall in 2013. The data shows prices were down 3.9% in Paris and 2.9% in Ile de France. In surrounding departments prices also fell, down 6.5% in Seine et Marne, 5% in Hauts de Seine, 3.5% in Seine Saint Denis, 4,4% in Val d’Oise, 0.6% in Essonne and 0.4% in Val de Marne. Only Yvelines saw prices rise, up 2%.

The overall national fall of 1.8% is less than expected, according to estate agents. Elix Rizkallah president of LaForet, the third largest chain of agents in France, had thought prices per square meter might have fallen by up to 5%. But he also pointed out that in some rural areas the actual fall in prices is probably much bigger than averages suggest, with some locations experiencing price falls of up to 15%. He added that outside of Paris sales of properties worth €400,000 or more are rare.

Century 21 said that the national average price fall is far less than expected considering the gap between prices and household income and this is due to the low interest rates. The proportion of financing for home sales increased from 76.6% in 2012 to 79% in 2013, the firm’s data also shows.

According to Laurent Vimont, president of Century 21, it is not just the rates this year but a long term steady rise that will hit the property market. ‘The unknown is the magnitude of the rate increase in 20 years. If it rises from 3% to 4% prices will fall by 5% to 10%,’ said Vimont.

He believes that in the short term the market is affected by sellers refusing to bring down their asking prices meaning that sales are limited to those who need to move and other potential sellers are not bothering at present.

However sales have not suffered. Century 21 reports a 3% rise in transactions in 2013 compared with a 12% fall in 2012. Guy Hoquet saw sales increase by 4% and at LaForet there was a 5.5% rise. These figures indicate that sales have been much better than expected at Notaires had predicted a fall in sales of 2.8%.

Leave a comment

Your email address will not be published. Required fields are marked *