French property trends 2008
Some people came to a definite conclusion about the state of the property market in 2008 early on. However, we are reserving
judgement until the beginning
of April, when we will have
nearly all the data for 2008,
particularly the data for the
last quarter. Why the caution?
Because we should not overlook
the fact that, according to the
figures published by the
Observatoire National des Marchés
de l'Immobilier (Property pricemonitoring
and research
institute), more home loans
were made to households in
2008 than in 2000, 2001 or 2002
– none of which are considered
‘bad’ years. However, it is clear
that 2008 was marked by:
• A sharp fall in the volume
of sales for both resale and
new-build property, with resale
property falling by 25% on
average, as announced by the
notarial profession at the
beginning of September, or
600,000 to 650,000 sales
compared with 870,000 in 2007.
Sales of new property fell by
44% on average, according to
the FPC (Association of
property developers) over the
year between 1 October 2007
and 1 October 2008.
• An apparent fall in prices.
At first glance, this was very
moderate, not general and not
uniform and sectors where
prices had risen too fast in
recent years were the most
affected. Paris and some other
large conurbations seem to
have bucked the trend. The
Notaire Insee Province Index
(an index of prices in the
provinces produced by notaires)
for the third quarter of 2008
recorded a slight fall in prices
of 0.3% for apartments and
0.4% for houses, in comparison
with the index for the third
quarter of 2007. In Paris, over
the same period, the price of
apartments rose by 7%, while
they rose by 4.4% in the Paris
region,Ile-de-France, although
the price of houses in this
area rose by only 0.4%.
Source: Maître Pierre Bazaille, president of the Institut Notarial de l'Immobilier (Notarial institute of real estate)
French property trends 2009
With respect to houses, a new property cycle began in the third quarter of 2004, and for apartments, this cycle began in the fourth quarter of the same year. The indices produced by the Notaires de France/INSEE (Office for national statistics) show that these dates marked the beginning of a decline in the rate of increase in property prices, which was confirmed in subsequent years...
What to expect in 2009? In the rural property market
(outside the major conurbations
and Ile-de-France i.e.
approximately 40% of house
sales), we should see a marked
fall in prices. In less privileged
districts of major urban areas,
prices should fall by 5% on
average. By contrast, in the best
districts of the same cities, we
should see relative price stability
or perhaps a very slight fall. This
judgement applies particularly
to Paris.
With respect to new-build
property, we can expect a rise
in the stocks of finished,
unsold housing (with a stock of
4,000 units).
With respect to building land,
which has been difficult to
market for several months, the
‘€15/day’ and the ‘Pass foncier’
schemes, through which the
state helps those on modest
incomes to buy their own new
home, may bring a partial
solution to this situation,
provided the allocation rules are
completed and expanded.
Finally, we expect to see
fewer foreign buyers, except in
Paris. This will apply particularly
to British buyers, marking a
departure from previous years,
due to the fall in the value of the
pound sterling against the euro.
If the economic crisis
becomes a major monetary
crisis as well and, if
unemployment rises above three
million, it is difficult to imagine
the impact on the volume of
transactions and prices. We
would, undoubtedly, see
volumes contract even more
than they have done so far.
However, real estate would
certainly become a safe haven,
and come to be valued as gold
was in the years that followed
the crash of 1929.
Source: FPC/ECCN, DAEI/SESP
Further analysis and the related
graphs can be found at
www.notaires.fr.
Editorial committee: Philippe
Laborde, Pierre Bazaille, Thierry
Delesalle, Michel Pagès, Olivier
Pavy and Caroline Gaffet.
Published by: Conseil Supérieur du
Notariat (High council for the
notarial profession)
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