Trends in property prices: city centres have limites influence on their outskirt
A 10-year analysis, since the 2008 crisis
In 2020, France has 22 cities that represent 39% of the population and 43% of jobs. According to the General Commissariat for Regional Equality, "cities exert inﬂuence on their neighbouring peri-urban and rural areas, small and medium-sized towns. These areas beneﬁt from the growth and dynamism of the cities and contribute to their appeal. Cities thus play a pivotal role with regard to territorial development". This study aims ﬁrst and foremost to assess changes in the prices of older properties in each metropolis in 2018, as well as since the last property crisis of 2008. Furthermore, it compares price changes in the cities with their surrounding territories.
The prices of older properties in France have experienced alternating cycles of rises and falls since 2008. After the so-called "subprimes" crisis of 2008-2009, prices generally picked up again until 2011. They then fell until 2015, and rose again up to 2018. Apart from Bordeaux, where prices have hardly stopped rising since 2010, the French cities have at the same time seen such peaks and troughs in varying degrees.
However, while the prices observed in 2018 had never been so high for 10 years in the cities of Lyon, Nantes, Rennes, Strasbourg and Toulouse, they had still not regained their 2008 levels in Brest, Dijon, Metz or even Toulon, cities that have generally seen smaller changes than the others. But what about price trends in the areas surrounding these cities?
22 cities - Created by the local authorities reform act of 16 December 2010, these are EPCI (public corporations for cooperation between local authorities, deﬁned as "metropolises" in French) with over 400,000 inhabitants in an urban area of over 650,000 inhabitants, namely regional capitals or cities in the centre of a labour market region.
The areas surrounding each of these regional cities correspond to the perimeters of the urban areas. Metropolises that encompass virtually all the urban area or even extend beyond it have been excluded from the analysis (Saint-Étienne, Lille, Marseille, Toulon and Nice. For Paris, the periphery is limited to the ÎIe-de-France region).
The most dynamic cities show greater differences with their surroundings*
Between 2008 and 2018, changes in the prices of houses were more favourable in the cities themselves than in their outskirts. The differ-ences vary according to the dynamism of the markets. For instance, the cities where prices rise the most are also those where the price differences with their outskirts are the greatest. In Bordeaux for example, the prices of houses rose by 42% in the city but by only half as much in its outskirts. Conversely, the cities where prices are falling are characterized by smaller differences with their outskirts. For instance, prices fell by 8% in Dijon and by 9% in its outskirts.
*As the number of transactions in older apartments in the areas surrounding the regional cities is still too low, the rest of the analysis will only focus on the older houses market.
Less bullish periods in the outskirts
The details of the changes in each of the bullish and bearish phases show that the disparities are greater in the bullish phases. During the 2009-2011 bullish period, nearly half the cities showed price change differences with their outskirts over 3 percent, peaking at 8 percent for Rennes (+13% in the city itself and +5% in its outskirts). During the two periods of falling prices (2008-2009, 2011-2015), the differences between the cities and their outskirts were greater than 3 percent for roughly a quarter of them.
In conclusion, it appears that changes in prices in cities has in the end had a limited inﬂuence on price changes in their outskirts. In periods of price increases, the dynamism of cities does not have a knock-on effect on the outskirts in the same proportions, which tends in particular to widen the price gap between cities and their outskirts.
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