The highs and lows

Living France - - Les Pratiques - no­

On the whole, 2016 was a dy­namic year for the French prop­erty mar­ket, ac­cord­ing to the lat­est re­port by No­taires de France. Analysing the prop­erty mar­ket in the third quar­ter of 2016, the re­port re­veals that an es­ti­mated 843,000 trans­ac­tions were com­pleted in the 12 months to the end of Oc­to­ber, rep­re­sent­ing a year-onyear in­crease of 9%.

Sev­eral fac­tors were shown to in­flu­ence the mar­ket, in­clud­ing in­ter­est­free loans, rel­a­tive price sta­bil­ity in ma­jor towns and at­trac­tive in­ter­est rates. The lat­ter is thought to have helped boost buy­ers’ pur­chas­ing power by 29% over the last eight years.

Prop­erty prices con­tin­ued to rise, fol­low­ing trends first noted at the start of the year. In the third quar­ter of the year, apart­ment prices had risen by 0.8% and house prices, which had fluc­tu­ated slightly, bounced back, in­creas­ing by 1.3%. This rise meant that for the third con­sec­u­tive quar­ter, prices rose year-on-year by 1.6%, with a more marked in­crease for houses (+1.8%) than apart­ments (+1.3%).

How­ever, this up­ward trend has not been seen across the whole coun­try. An­nual trends re­gard­ing re­sale apart­ments out­side of Île-de-France are mixed. For ex­am­ple, prices in StÉ­ti­enne and Di­jon fell by 2.9% and 4% re­spec­tively, while prices re­mained sta­ble in Be­sançon, Greno­ble, Mar­seille, Mont­pel­lier, Nice, Or­léans, Rennes and Tours. Mean­while, a steady rise of 2.5% year-on-year was noted in Toulouse, Lyon, Brest, Toulon, Reims, Stras­bourg, Lille and Le Havre. Bordeaux recorded the big­gest price in­crease of 9.8% for re­sale apart­ments, fol­lowed by Nancy with an in­crease of 5.6%.

The out­look for 2017 is positive: based on the num­ber of pre­lim­i­nary con­tracts across France, the price index pro­jec­tion for the end of Fe­bru­ary 2017 sug­gests this up­ward trend will con­tinue. Trends for re­sale apart­ments show an in­crease of 4.5%, which would mark a re­turn to the price lev­els of 2014, while a rise of 5.7% in re­sale house prices would bring prices to the same level as in 2012.

In ad­di­tion to lend­ing rates, sev­eral other fac­tors will im­pact the prop­erty mar­ket, in­clud­ing gov­ern­ment schemes, such as the Pinel pro­gramme which en­cour­ages rental in­vest­ment. How­ever, a re­turn to the ex­emp­tion from cap­i­tal gains tax after 15 years of own­er­ship could sta­bilise prices and at­tract buy­ers.

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