French property: Analysis of the market
The analysis of the real estate market is derived from the French property marker report of notaires de France. It presents the real estate situation in France: trend and evolution of real estate prices.
French older properties market
With 985,000 transactions made over the twelve months to the end of March 2019, the annual volume of transactions remains at a historically high level, achieving a new record. Moreover, it has not stopped increasing year-on-year each month since the previous quarter (965,000 in December 2018), and is higher than the ﬁgure observed a year earlier (960,000) by 2.6%. At this rate, one million transactions could be achieved before the end of 2019. Nevertheless, while still impressive, this number of transactions still needs to be put into perspective, as it is related to the available housing stock, which increases by around 1% per year. Therefore, the proportion of sales remain equivalent today to what it was in the early 2000s. As with the previous quarter, we are observing a stabilisation of volumes in Greater Paris, after three years of growth. It will be necessary to observe volumes in the French provinces in the months to come to see whether they settle down as well.
Changes in the volumes of older properties in the 2000–2019 period
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Change in projected indicators based on pre-contracts in mainland France: projection at the end of August 2018
This continuous movement is nevertheless based on the unﬂinching conﬁdence of the French people in property; still considered a sure investment, where price increases are not putting people off buying. The overall debt of the French people is thus increasing, but the combination of low rates and the duration of loans is curbing the upturn in prices.
Slight falls in interest rates, which were already at a (very) low level since the start of 2019, are contributing to keeping the volume of sales and prices high. The average interest rate on new home loans (long-term and ﬁxed rate) decreased in April. Similarly, the duration of household borrowing is increasing, now at 19 years and two months on average. But it is common nowadays to resort to borrowing over 25 years. This policy of the central banks to keep the credit rates close to the level of inﬂation is making new ﬁrst-time buyers more viable.
The market, stimulated by the rates and the resilience and conﬁdence in the French economy, despite the social tensions observed this winter, is currently running at full throttle. It is essential, however, to monitor the development of the ECB’s monetary policy, which could increase the rates again at the end of the year. This would raise the “property market fuel price” and would trigger a stabilisation of prices and, consequently, a settling down of the market. Nevertheless, although no huge upturn, it should still be dynamic, preserving the increased volumes.
New properties: a broken market
Consult the French property market in the interactive version
- I want to buy an apartment. My bank refused my loan. Can I ask the seller a staggered payment of the selling price?
- I buy a property for which the mandate of sale provides that the payment of real estate agency commission is the responsibility of the seller. Why is this commission included in the base for calculating notaire fees?