Saturday, 14 December 2013 21:06

The French House Price Muddle

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House prices in France appear to be resisting any major fall, but precise and reliable information continues to remain scarce.

According to the latest review of the market from the French notaires, house prices fell by around 1% in the year up to the end of June 2013, but increased by 0.7% in Q2/2013 over Q1/2013.

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The reporting of these figures for the first half of the year trail those of FNAIM, the French estate agents' association, which we covered recently in our article What is Happening in the French Property Market?

However, such is the dearth of information contained in the reviews that neither are entirely convincing.

This may well be due to the slowdown in the level of activity in the market, with an average reduction in sales in the regions of around 18% over last year, and larger in rural areas. Without sales, who can judge just what is happening to prices?

As usual the headline figure from the notaires hides a contrasting reality on the ground, with significant a variations across the country, as can be seen from the table below.

Regular readers will be aware of the level of circumspection we hold about 'average' figures, so we give our usual health warning about reading too much into them.

Even the notaries themselves admit the figures are indicative only, as they take no account of the characteristics of the properties or the percentage level of sales of each type of property. They are merely the median average in the period.

As the analysis is drawn primarily from transactions in the main urban areas of each department, neither they do fully reflect what is happening to country properties.

General commentary suggests that there are some signs of a revival in the market, although it remains fragile and hesitant.  National agents Laforet state that the main stimulus to the market outside of Paris is sales under €150K.

The major on-line mortgage broker,, describe it as a three speed market:

  • In Paris, in the large and vibrant cities and on the coast the market has shrunk by around 10% but remains fluid and prices have barely fallen.
  • The smaller cities and suburban areas they describe as a sluggish market with sales down 25%, and prices falling by 5% to 10%.
  • In depressed urban and rural areas, the market is often blocked, with sales down 40%, even after price cuts of 10% to 20%.

In their own latest review, Crédit Foncier, the specialist mortgage provider, make a point on which there seems to be general agreement: "Only those properties offering good value for money are selling, which masks the overall decline in the price of older property."

They estimate that number of sales will fall by 9% to 645,000 in 2013, compared to 709,000 in 2012 and 808,000 in 2011, a figure that is broadly in line with the forecast of the notaires.

In their view, the reasons for the low number of sales are not hard to spot - a high level of unemployment, a tough fiscal climate, and prices that remain overvalued. The result is that there are both fewer buyers but also fewer sellers.

Crédit Foncier consider that there is a strong need for a 'price correction' in the market, and forecast prices will fall by around 4% this year and again in 2014.

They note in particular that there are now far fewer first time buyers, in a market now dominated by existing owners changing homes. "We have known an exceptional period of 10 years of prices rising in the market. It is therefore logical that we now have a certain reflux. This decline is necessary to maintain fluidity and a healthy market. It is likely to avert a situation comparable to that in 1991 when prices remained fixed and the market blocked", says Stéphane Imowicz, Director General of Crédit Foncier Immobilier.

By contrast economic consultants Xerfi state that whether prices 'need' to fall is one question, but whether they 'will' actually fall is a different matter. They take the view that, overall, prices of older property will hold up, due to a number of factors - historically low interest rates, the demand by younger households to get onto the housing ladder, the shortage of new homes being constructed, and the growth in the number of households.

The table below shows the average price for existing houses in each department of France (excluding Ile de France) at the end of June 2013, together with the average change in price over the 12 months June 2012/June 2013.

To foreign buyers some of these values may appear low, but that is because in most areas international sales of higher priced property only account for a small percentage of total sales.

Based on these figures, the cheapest department in France is Creuze in the Limousin, whilst the most expensive is Alpes Maritime, in Provence-Alpes-Côte d'Azur.


Departmental House Prices First Half 2013
Bas-Rhin €209,000 -4.0%
Haut-Rhin €193,300 -3.9%
Dordogne €120,000 -3.7%
Gironde €210,000 +0.8%
Landes €170,000 -1.4%
Lot-et-Garonne €123,600 -3.3%
Pyrénées-Atlantiques €205,700 -1.3%
Allier €91,000 -2.3%
Cantal €95,000 -3.3%
Haute-Loire €127,000 -3.3%
Puy-de-Dôme €150,800 -4.2%
Côte d'Amour €127,800 -0.5%
Finistère €142,000 -1.4%
IIle-et-Vilaine €180,000 -2.3%
Morbihan €165,900 -2.2%
Côte-d'Or €165,000 -2.5%
Nièvre €85,000 -3.4%
Saône-et-Loire €118,000 -2.8%
Yonne €120,000 -5.4%
Cher €105,000 +3.3%
Eure-et-Loir €155,000 -1.2%
Indre €94,000 +1.0%
Indre-et-Loire €177,400 +2.7%
Loir-et-Cher €125,000 +8.0%
Loiret €160,000 0.0%
Ardennes €110,000 -5.4%
Aube €132,000 +0.6%
Haute-Marne €89,100 -3.6%
Marne €170,000 -5.6%
Doubs €165,000 -7.0%
Haute-Saône €115,000 -4.4%
Jura €127,500 -6.3%
Belfort €165,000 -6.1%
Aude €134,000 -5.0%
Gard €195,000 -2.0%
Hérault €215,000 -4.0%
Lozère €105,000 -3.4%
Pyrénées-Orientales €175,200 -3.6%
Corrèze €109,800 -1.9%
Creuse €75,000 +1.4%
Haute-Vienne €115,000 -2.4%
Meurthe-et-Moselle €147,000 +1.0%
Meuse €97,400 0.0%
Moselle €160,800 +2.1%
Vosges €120,000 -0.6%
Calvados €170,000 -1.6%
Manche €130,000 -2.1%
Orne €100,000 -0.9%
Ariège €95,000 -2.3%
Aveyron €120,000 -1.0%
Gers €146,400 -1.0%
Haute-Garonne €236,100 +1.5%
Hautes-Pyrénées €140,300 -2.1%
Lot €132,000 -1.0%
Tarn €134,000 -4.0%
Tarn-et-Garonne €146,200 -4.3%
Nord €149,900 -2.4%
Pas-de-Calais €135,000 -0.4%
Loire-Atlantique €200,000 -0.9%
Maine-et-Loire €150,000 -2.9%
Mayenne €110,500 -2.1%
Sarthe €125,000 -2.2%
Vendée €145,000 -3.6%
Aisne €115,000 -2.9%
Oise €190,000 -3.9%
Somme €125,000 -5.9%
Charente €110,800 -2.4%
Charente-Maritime €175,000 -3.9%
Deux-Sèvres €120,000 -1.2%
Vienne €134,000 -1.2%
Provence-Alpes-Côte d'Azur
Alpes-de-Haute-Provence €175,000 -1.8%
Alpes-Maritimes €430,000 -1.0%
Bouches-du-Rhône €289,000 -0.9%
Hautes-Alpes €193,500 -1.8%
Var €320,000 -2.9%
Vaucluse €220,000 -1.7%
Ain €194,000 -2.7%
Ardèche €154,300 -3.8%
Drôme €185,700 -3.4%
Haute-Savoie €340,000 -1.6%
Isère €206,600 -4.8%
Loire €157,500 -3.6%
Rhône €277,200 -0.9%
Savoie €210,000 -0.7%
Eure €155,600 -4.7%
Seine-Maritime €157,000 +0.2%

Source: Notaires de France


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