Official website of Notaires de France

French property market - Analysis

  • The resale market

    • Indexes

    • In a difficult social and economic context, property is still a safe investment, both for investors and for private individuals anxious to protect their savings against stock market fluctuations, which have been in no way reassuring in recent years.

    • At the end of July, the volume of national nationwide continued to grow. The number of transactions in second-hand properties over the last twelve months is estimated at 839,000, up 15% over one year, exceeding the peak recorded in February 2012 (graph below).

    • Sales have picked up again because buyers are no longer expecting prices to fall and believe the time is right to take the plunge, given the historically low interest rates. The lending terms observed for several months have contributed to this increase in volumes. This is because the purchasing power of households acquiring property has improved since the drop in rates and better enforcement of the PTZ (interest-free loan). But there is a risk that such demand will push up prices.

    • However, according to the INSEE (French National Institute of Statistics & Economic Studies) and Notary indexes, in the second quarter of 2016, prices of second-hand properties were steady compared with the first quarter of 2016, after rising slightly over three quarters. This stability however reflects different situations: the price of apartments is rising (+0.4%), whereas house prices, which are more erratic, are falling slightly (-0.4%).

    • For the second quarter running, prices of second-hand properties are growing over one year : +0.6% in comparison with the second quarter of 2015. This slight upturn concerns houses (+0.7%), but also apartments for the first time in four years (+0.5%).

    • In Greater Paris, prices of second-hand properties are up for the second quarter running (+0.8% compared with the first quarter of 2016). Over one year therefore, prices are continuing to recover : +1.4% between the second quarter of 2015 and the second quarter of 2016. This increase concerns both houses (+1.2%) and apartments (+1.5%).

    • In the French provinces, the prices of second-hand properties fell slightly between the first and second quarters of 2016 (-0.5%), after rising slightly for three quarters. However they are higher than one year earlier (+0.3%). House prices are still up (+0.6% between the second quarter of 2015 and the second quarter of 2016), and the drop in prices of apartments is smaller (-0.5% after -0.9% in the first quarter).

    • In terms of median prices, the changes still vary from one department to the next: prices of apartments are still mostly falling, whereas house prices are mostly rising. However, certain geographical areas like Greater Paris have seen inversions in the price curve.

    • Regarding the main cities in the French provinces, Bordeaux, Nantes, Toulouse, Marseille, Lille and Strasbourg for instance, prices of older apartments are rising by 1% to 6%. On the other hand, they are still falling in Saint-Etienne (-4.1%), Rennes (-1.2%) and Montpellier (-3.8%).

    • So there are still disparities, even though the market is showing real improvement.

    • Pre-contracts

    • The projection of price indexes at the end of November 2016 based on pre-contracts for the whole of mainland France shows a rise in prices of both apartments (+2%) and houses (+2.7%).

    • In the French provinces, the early indicator for older apartments is down year on year (+0.3%) Houses are following the national trend, showing +2.6% year on year.

    • In Greater Paris, prices of apartments should continue to rise slowly in the coming months. The price per m² is expected to be €5,380  in October 2016, up 1.8% in one year. After slight fluctuations in recent months, prices of houses in Greater Paris in October should equal those recorded one year earlier (+0.5% over one year).

  • The new housing market

    • Housing construction
      Results at end of July 2016 ((Extract from Datalab Essentiel report No. 26 of July 2016)

    • Variation Q/Q-1 (*) All Single-occupancy Apartments
      (including blocks
      of luxury flats)
      Approved housing -0.3% -0.9% +0.1%
      Housing starts -0.1% +1.3% -0.9%

      * Last three months compared with the previous three months.

    • In cumulative raw data over twelve months, the number of properties approved for construction (401,200) rose by 8.3% compared the cumulative total for the previous twelve months.
    • Marketing of new properties
      Results in the 2nd quarter of 2016 (Extract from Datalab Essentiel report No. 28 of August 2016)

    •   2nd quarter 2016
      Reservations +18.7% year on year (33.100 units)
      Offered for sale +24.2% year on year (35.900 units)
    • The number of properties currently on the market is back to its level of one year ago (101,200 properties).