Property market report

The increase in French property prices was muted in the third quarter of the year increasing by 0.6%* compared with the 4.3% increase experienced across regional areas of France in Q2. In Paris, prices were on the increase again with a rise of 3% in Q3, though the increase in the house prices was just 0.2%. Looking at France as a whole we saw an increase of 1% during the last three months which gives an increase of 7% for the year since Q3 2010. This constitutes +8.5% for apartments and 5.5% for houses.

The main reasons for the slowdown are the increases in rates earlier in the year which have fed through into the market and helped fuel economic uncertainty. This price stall may well be set to continue as many French people abandon projects for rental investments and second homes after increases in capital gains tax announced last month. Whilst rates have increased, they are still at relatively low levels. The capital gains tax changes are less of a concern to British and international investors as for the majority the overall net position has not changed much.

Further highlights for investors include some very strong growth in prices over the past 12 months; apartments and houses in the Champagne region have seen average rises of 10.5%, a return to growth in the Rhone-Alpes region of 3.5% and an increase of 12.6% in the popular PACA region which includes Provence, the Alps-and the Côte d’Azure. Good news for those seeking mortgages on ski property this winter.

At the prime and super prime end of the market the total sales were estimated at €131million for the last quarter, an increase of 67% versus Q2. Whilst the majority of buyers are French, international investors are making up an increasing proportion of the market as many seek secure value assets.


*Figures obtained from various sources including the FNAIM