Happy New Year to all FrenchEntrée readers. We kick off this year with a guest blog from Alison Morton in the Loire:
In their latest report (October 2011) the Notaires de France presented a sober picture.
Although published three months after the previous quarter ends, the Notaires only report on actual transactions; their data are based on the sale documents passing through their hands, not on mortgages granted or sampling, so what you see is what you get (WYSIWYG to our computer friends).
In June 2011, sales of existing properties in France had risen from the previous 12 months’ figure of 783,00 to 812,000, so a trend in the right direction, but not stunning. Sales of property outside Paris increased by 8% in the second quarter of 2011 compared to the same quarter in 2010. Paris prices skewed the picture with the annual rise in prices for apartments (unbelievably) reaching 22% in the centre. Outside Paris, apartment price rises were more modest: 3.8%, with house prices increasing by 4.9%.
But this covers France as a whole and provides an over-generalised view. In the LTPS area, in the Deux-Sèvres (79), prices of resale property increased 6.9% year on year in 2010/11 compared with 2009/10 recovering from the dreadful dip in 2008. In the Maine-et-Loire (49), the same increase was a more encouraging 9.4%.
In the Angers area, the average actual price paid price for a 5-room house (all types) last quarter was 181,000 euros; around Saumur, the same cost 140,000 euros. In France, rather than designate use of rooms, properties are quoted in official statistics as number of rooms excluding kitchen and bathroom. So a 5-room property could be living room, dining room, and three bedrooms, or large living/dining room a study, playroom and two bedrooms.
Further south in the north Deux-Sèvres, the same-size property achieved average price of 100,000 euros. A word of caution: the Deux-Sèvres is rural and some older properties like farm cottages are fairly small and have been abandoned, so can be sold for their land at well-below average prices. Great for someone looking for a ruin to convert, but they tend to pull the average price statistic down of well-maintained, solid rural houses. More prudent to allow 125,000 euros for a reasonable 4 to 5 room property.
But both areas have seen sales slowing down since the basis period for that report which only covered the twelve months to June 2011. Understandably, fewer people are putting their property on the market.
And for the future?
The Notaires say they are expecting a significant fall in sale numbers in 2012, possibly of several tens of thousands of transactions, in a market showing increasing levels of inter-regional contrast.
Three reasons:
- the economic and financial environment. Growth forecasts in France have been revised downwards, causing the banks, which are already facing numerous problems (notably the Greek crisis), to implement strict rules and to make their credit restrictions more stringent, despite interest rates remaining low;
- reform of capital gains tax on property, due to come into force on 1 February next year which, by doubling the period of ownership required in order for exemption from 15 to 30 years, will dissuade some owners of rental accommodation, second homes or inherited property assets from putting them up for sale. Ditto for potential investors in these assets; and
- the customary wait-and-see approach seen during pre-election periods.
Further trends since the beginning of 2011 are likely to carry on affecting the property market in the coming months:
- a significant fall in the number of first-time buyers (i.e. buyers aged under 30); and
- a rise in buyers over 60: 16% for the provinces, compared with an average of 12% in previous years.
Prices are likely to stay at current levels due to shortage of available stock.
The verdict?
Do read and research, including expert analysis of the market. But make sure it really is expert and above all, relevant. Regions, districts, towns, cantons and municipalities vary wildly and while describing trends, no statistical report can reflect the situation on the ground. In my opinion, although there may be less choice of property for a while, owners will be more open to offers than at this time last year.
If you’re thinking seriously of buying in France in next year, consider buying in the expertise of a property finder like LTPS who knows the local area at the current time. We’ll scour the whole market, sift out the dross, collect the comparable evidence and help you buy the house at the lowest possible price.
After all, we live here.
So after all the polling, posturing and public wooing, the results are in. Yesterday’s first round of voting in France’s presidential election showed two things. First, that pollsters were right in tipping Socialist François Hollande to lead the vote (28.6%) ahead of beleaguered incumbent Nicolas Sarkozy (27.1%).
A guest blog from Rebecca Russell of 
