Rising rents slow – French rental property sector

In the first eight months of 2014, rents in France increased by 0.7% year on year. The same rate as inflation, according to a study published Tuesday Clamor Observatory.

The figures showed that In two-thirds of the country’s twenty largest cities rents either declined (Dijon, Montpellier, Reims …) or increased less than inflation (such as in Bordeaux, Grenoble, Marseille, Nantes).

Traditionally the arrival of the summer months is accompanied by a significant upturn in business for the French rental property sector – with more tenant changeovers and rental prices rising as a result – but this did not take place this year.

These latest figures demonstrate that the domestic French rental market is now at a similar level in terms of fluidity as it was back in 1998, largely as a result of depressed demand due to rising unemployment and uncertainty about the power to purchase.

This slowdown rental increases is likely to bring water to the mill of professionals in the French property rental industry, especially for those who criticised the introduction of rental price controls, many of which were seen as counter-productive by those in the industry.