The trend of rising French property prices is now real. In the last quarter of 2016 prices rose by 1.8% for the whole of France, after 1.3% in the third quarter and 0.6% in the second, according to INSEE figures.
The reason? Prices have risen again because ‘households’ have started buying again, which means the French property market remained very dynamic throughout the whole of 2016 and that was after a relatively good year for 2015 too.
The slight upturn in French mortgage interest rates towards then end of 2016, as well as the increasing property prices, prompted undecided French domestic buyers to take action, with the uncertainty of the presidential election shifting into the background.
Are sales back to pre-crisis levels?
Last year, sales volumes reached and even surpassed their record levels of May 2006, with nearly 850,000 properties sold. This record can of course be tempered slightly, as that was 10 years ago, with the population also increasing as well as housing stock, which has gone up by 1% per year on average. This means that it would have been necessary for the sales volumes to exceed 900,000 to really exceed the record of 2006. Nevertheless, 2016 was a good year.
Price increases were largely driven by the Ile-de-France region (+ 3.1% over one year), and particularly central Paris (+4.4%). Outside of Ile-de-France, prices rose more moderately, by 1.3% over one year.
In the Paris region the French Notaires recognised “the renewed fluidity of the market and sales growth of 8% in resale properties and 10% in the new homes market.” Over the next few months, the French notaires expect prices to continue to rise at the same rate, reaching 3.7% in April.