Prices for existing French property fell 3.1% in 2008 and 4.9% in 2009 but began to climb again in 2010, rising by 1.5%. If you compare the lowest point for French property prices in recent times, prices have increased 5.3% from the first quarter of 2009 to the end of 2010. To look at things another way, you could say that prices have remained flat for the past five years, making it an interesting time to find a bargain. One place where prices certainly have not remained flat is Paris, where prices rose by an average 4.4% over the same period.
The low interest rate environment has contributed to the recovery of French property prices, to a large extent reducing payments on existing mortgages and increasing the purchase power of borrowers as the cost of borrowing has come down. Transaction numbers increased 25% in 2010, rising to over 700,000 – just 100,000 below the peaks seen during the previous decade. Despite the recent increases in rates, the National Federation of French Es tate Agents (FNAIM) predicts growth in 2011 of between 3% and 6%, the higher figure based on interest rates not rising more than 1.5%. If interest rates did rise further than that we would see increases on the lower side. These predictions are for the whole of France so of course there will be regional variations. Average falls in the prices of apartments of more than 6% were registered in the medieval town of Troyes, a good performer in recent years, and also in Perpignan and Pau. Many areas on the Cote d’Azur saw rises of over 6% in the values of apartments for the year including Cannes and St Raphael, with Lyon and Marseille increasing by 5% and 4.5% respectively. Average increases in the prices of houses of between 3% and 9% we recorded in the Pas de Calais, Île de France (Paris) and PACA (Provence-Alpes-Côte d’Azur), making these regions the top three for 2010.