French property market analysis 2011 october

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French property market analysis 2011 october

  1. 1. French property market report N° 13 - OCTOBER 2011 months in 3 departments: Meurthe-et- Moselle, Pyrénées- Orientales and Deux- Old apartments Old houses INSEE NOTA- Sèvres. RIES INDEX Apartment prices, in contrast, show a rise (INSEE- Index value Variation* Index value Variation* of over 10% in 8 departments: Alpes-de- labeled) Haute-Provence, Corse-du-Sud, Haute- 2011 2011 3 2011 2011 3 Corse, Indre- et-Loire, Mayenne, Nord, 1 year 1 year T1 T2 months T1 T2 months Orne and Haute- Vienne. Similarly, house Metropolitan prices have risen by 10% in 15 departments 231.0 236,4 2,3 % 10,3 % 194,4 195,8 0,7 % 5,3 % (Ardèche/Ardennes/Aube/Corse-du-Sud/ France Haute-Corse/Dordogne/Jura/Haute- Île-de-France 246.2 254.8 3.5 % 17.3 % 188.2 190.3 1.1 % 6.5 % Loire/Lot-et-Garonne/Morbihan/Moselle/ Nièvre/Haute-Saône/Haute-Vienne/Terri- Provinces 217.1 219.5 1.1 % 3.8 % 196.6 197.7 0.6 % 4.9 % toire de Belfort). The price falls are occur-* 3-month variation: development between 2011T1 and 2011T2 * year-on-year change: development ring especially in average-sized cities, such capital has thus reached 22.5% in Paris pro- as -2% in Le Havre for apartments, and per and 15.1% in its closest suburbs. In the -9% in Bayonne for houses. There are few provinces, however, the annual rise in prices large falls or falls affecting large cities. Analysis is both more moderate and less contrasting between apartments and houses. Indeed, This confirms the great variation between markets, which is not simply a matter of a house prices actually rose by more than contrast between Paris and the provinces. apartment prices (4.9% compared to 3.8%). It should be noted that the information■ The resale market    This trend is confirmed by the figures re- corded in the Rhône-Alpes and PACA re- from preliminary contracts displays a com- parable level of variation. gions, where the price gap between housesVolumes and apartments reached or exceeded twoAt the end of June 2011, the volume of percentage points.sales of existing properties in France num- ■ The new-build market   bered 812,000 in one year. This level ofgrowth is admittedly slower (+16% in June In the second quarter, price stability pre- According to the Markemetron bulle-2011 compared with +32% in December vailed  in  the  provinces,  for  both  houses  tin (sales outlook indicator for individual2010), but it is nevertheless contributing and apartments. non-estate houses), the annual numberto a return to the transaction levels seen The provincial market appears to be driven of transactions relating to such propertiesduring the “best years” (2003-2007). by a certain number of large conurbations was 5.5% down at the end of August 2011.In Ile-de-France, the trend is one of stabili- such as Lille and Nantes, where prices are This trend has accelerated, since the fallsation (+1% in May-July on the same period rising by around 10% each year, with little was just 2% three months earlier. It is alsoof 2010). The provinces, meanwhile, show difference between houses and apart- more accentuated in the South and West.a significant rise (+8%) in the number of ments. In Toulouse, contrastingly, the rate As for real estate development, sales ofproperties changing hands in the second of increase is much greater for houses. dwellings to private individuals have re-quarter of 2011 compared with the second Apartment prices are falling in 17 departments tracted by 22.6% between the second quar-quarter of 2010. (Allier/Hautes-Alpes/Calvados/Cantal/Cha- ters of 2010 and 2011, including 21.8% in rente-Maritime/Gard/Loir-et-Cher/Loire/ apartment blocks. New instructions havePrice Lot-et-Garonne/Manche/Oise/Pas-de-Ca- dropped by 8.6%. Twelve regions are expe-The  increase  in  year-on-year  prices  re- lais/Somme/Tarn-et-Garonne/Var/Vosges/ riencing a simultaneous fall in sales andmains generally strong in the second quar- Territoire de Belfort) and those of houses new instructions. This has led to a mode-ter of 2011 (7.8%), in spite of a slowdown. in 16 departments (Aisne/Alpes-de-Haute- rate rise (1.5%) in the number of dwellingsThis is due to the price of apartments ha- Provence/Cantal/Charente/Creuse/Drôme/ placed on sale (68,100) and the averageving risen by 10.3% in one year and that of Indre/Haute-Marne/Meurthe-et-Moselle/ sale period has risen from 7 to 8 and a halfhouses by 5.3%. This trend is confirmed in Orne/Hautes-Pyrénées/Pyrénées-Orien- months. This increase in stock applies inrecent months since, between the first and tales/Haut-Rhin/Deux-Sèvres/Somme/ particular to Île-de-France and the Rhône-the second quarter, a rise of 2.1% can be Vaucluse). Apartment prices have dropped Alpes region. The average price per m2 ofobserved in the price of apartments and of for two consecutive quarters in 6 depart- apartments sold in the second quarter of0.1% in the price of houses. ments: Allier, Calvados, Charente- Mari- 2011 is also up 7.7%, with rises seen in Au-Paris is displaying a price development time, Somme, Var and Vosges. vergne, Brittany and Île-de-France, whilequite distinct from the rest of the country. House prices have been displaying a the average price for individual houses hasThe annual rise in apartment prices in the downward trend for two consecutive risen by just 1.8%. French property market report NOTAIREs dE FRANCE - N° 13 - October 2011
  2. 2. Outlook■ The resale market make their credit restrictions more stringent, 10.3% for all pre-owned dwellings in Ile-de- in spite of interest rates remaining low. France and 16.2% for apartments in Paris,The recent change in the volume of Secondly, there’s the reform of the taxation a historically high rate, compared with antransactions reflects a slight slowdown of capital gains on property, due to come average of 8.6% in previous years.which we announced at the start of the year into force on 1 February next year, whichfor the second year half. However, the latest by doubling (to 30 years instead of 15) the As for the price of resale properties, thefiscal measures concerning the imposition period of ownership required in order to be developments should remain positive onof capital gains on property should correct exempt, will dissuade some owners of rental the currently dynamic markets which wethis trend. In addition, the volume of sales accommodation, second homes or property have already mentioned, due to a shortagefor 2011 should be equivalent or even slightly assets which are inherited (in two stages), of available stock.above that of 2010, which was 783,000. On the from putting them up for sale. The same willother hand, we are expecting a significant fall apply to a proportion of potential investorsin sale numbers in 2012, which could reach in these same assets. And finally, there is ■ The new-build market several tens of thousands of transactions, the customary wait-and-see approach seenall on a market showing increasing levels during pre-election periods. The end of the year should, as is usuallyof inter-regional contrast. Another trend detected since the start of 2011 the case, be more dynamic, due to a is likely to continue and affect the property temporary acceleration in new-buildThree reasons are combining to create this market in the coming months, namely: sales ahead of December 31 linked to thesituation. First of all, there is the economic - a significant fall in the number of first- imminent end of the full-rate Scellier taxand financial context. Growth forecasts time buyers (by which we mean buyers deduction scheme, and possible future taxhave been revised downwards, causing the aged under 30). adjustments. However, the volume of salesbanks, which are already facing numerous - a rise in buyers aged over 60: 16% for the from 2010, namely 115,000, will certainlyproblems (most notably the Greek crisis), provinces, compared with an average of 12% not be equalled, with a figure not exceedingto implement strict rules (Basle III) and to in previous years. 100,000 transactions most likely. Average price per sq.m. of old apartments Development over 1 year: 1 April 2010 to 30 June 2010 / 1 April 2011 to 30 June 2011 Dunkerque 1 933 € Metz 9,4 % 1 929 € Lille Reims 2 856 € 8,2 % 2 025 € 7,1 % 3,4 % Caen Paris Nancy 2 263 €  8 150 €  1 850 € Rennes 7,7 % 22,5 % 6,9 % 2 239 € 6,8 % Strasbourg Orléans 2 444 € Tours  2 046 €  Mulhouse 12,8 %  2 262 € 5,4 % 1 207 € 8,9 % 2,6 % Besançon Nantes 1 763 € 2 550 € 5,0 % 7,7 % Saint-Étienne Dijon  1 263 € 2 133 € Poitiers 2,4 % 1 515 € 1,0 % Guadeloupe -0,1 %   2 120 € Lyon Ns Limoges  3 107 € 1 352 €  Clermont- Nîmes 10,6 % La Réunion 10,6 %  Ferrand  1 775 €  2 292 € 1 587 € 2,0 % Grenoble Nice 3,8 % 7,6 % 2 422 € 3 679 € Bordeaux 2 738 € 4,5 % 8,4 % 9,5 % Toulon  2 324 € Annual change in price  4,7 % per sq.m. Bayonne 2 667 € Toulouse  Less than 0 % 12,8 % 2 464 € Haute-Corse 4,9 % Montpellier Marseille  2 352 €  From 0 % to 5 % 2 527 € 2 538 €    12,6 %  5 % plus 5,1 % 5,7 % ns = not significant (the volume of sales does not permit the calculation of suitable statistics) Source: Notaires de France property database (the prices in Île-de-France are an evaluation of Corse-du-Sud the INSEE notaries index for the 2nd quarter of 2011). Outside Île-de-France, the prices have been  2 924 € calculated based on an average volume of 150 transactions per city and per quarter French property market report NOTAIREs dE FRANCE - N° 13 - October 2011
  3. 3. Average sale price of older houses Development over 1 year: 1 April 2010 to 30 June 2010 / 1 April 2011 to 30 June 2011 Amiens Lille Rouen 156 000 € 179 000 € 180 000 € 6,1 % 8,5 % Reims Le Havre 10,4 % 200 000 € 182 200 € -5,2 % 4,5 % Metz Île-de-France 180 500 € Caen 304 700 € 2,6 % Brest 232 700 € 188 000 € 6,5 % Chartres Nancy 19,0%  189 500 € 170 800 € -3,8 % 0,5 % Tours Troyes  190 000 € 156 900 € 0,0 % 14,2 % Orléans Nantes 202 200 € 240 000 € 0,6 % 9,1 % Dijon Saint-Étienne 227 000 € Poitiers Chateauroux 182 000 € 113 000 € 2,9 % 158 000 € 1,1 % -1,3 % 9,2 % Lyon Ns 296 000 € Limoges 7,6 %La Réunion 145 000 €240 000 € 2,1 % 0,2% Grenoble 305 000 € Nîmes -0,5 % Bordeaux Montauban 194 000 € 246 900 € 159 000 € -3,0 %Annual change 10,2 % -0,6 % Toulonin sale prices 340 000 € 6,3 %  Less than 0 %  From 0 % to 10 % Toulouse 265 000 € Montpellier Marseille / Haute-Corse  10 % plus 8,4 % 303 500 € Aix-en-Provence 220 000 € 6,1 % 318 500 € 18,9 %ns = not significant (the volume of sales does not permit the calculation of suitable statistics) 9,8 %Source: Notaires de France property database (the prices in Île-de-France are an evaluation ofthe INSEE notaries index for the 2nd quarter of 2011). Outside Île-de-France, the prices have been Corse-du-Sudcalculated based on an average volume of 150 transactions per city and per quarter 300 000 € 20,0 % Price per sq.m. of new property in 2nd quarter of 2011 (apartments) Nord-Pas- Picardie de-Calais 3 307 € 3 094 € Champagne- Haute-Normandie 7,8 % -2,8 % Ardennes 3 023 € 3 088 € 3,5 % 5,3 % Lorraine Basse-Normandie 2 809 € 3 472 €  9,0 % Bretagne 3,2 % 3 178 € 11,0 % Alsace Île-de-France 3 019 € 5 031 € 7,8 % 8,8 % Pays-de- Franche-Comté la-Loire 2 730 € 3 456 € 0,5 % 7,6 % Centre 3 043 € Bourgogne 0,5 % 2 653 € Poitou-Charentes -8,2 % 3 574 € 7,4 % Rhône-Alpes Ns 3 728 € Limousin 8,3 % 2 666 € Auvergne 4,5 % 3 071 € 17,4 % Aquitaine 3 441 € PACA 7,1 % 4 176 € 4,6 %Price development per sq.m.   Less than 0 % Midi-Pyrénées Corse 3 269 €  From 0 % to 5 % 3 389 € Languedoc- 2,0 % 8,0 % Roussillon  5 % plus 3 280 €ns = not significant (sales volumes -0,4 %do not permit the calculationof suitable statistics)Source: FPI / ECLN / CGDD / SOeS French property market report NOTAIREs dE FRANCE - N° 13 - October 2011
  4. 4. Housing indices  France: the property price index forFrance as a whole is calculated by the International comparison:Notaires de France in partnership with property price index comparedthe INSEE. This index is published every to the income available per householdthree months and uses the hedonic pri- Base 2000=1cing method. The data result from sale Francedocuments transmitted by the notaries. United States United Kingdom  United states: the FHFA index producedby the Federal Housing Finance Agency,a US government body, measures thedevelopment of the price of individualhouses based on a sample of mortgageloans, using the repeated sales method. United Kingdom: the DCLG index isthe official house price index publishedby the British government, based on asample of mortgage loans. It uses thehedonic pricing method. Source: CGEDD according to INSEE, notarial databases, deseasonalized INSEE Notaries Indices, Freddie Mac, FHFA, R.Shiller, US Bureau of Economic Analysis, Census Bureau, Bureau of Labor Statistics, UK DCLG, UK National Statistics Graphic downloadable at: http://www.cgedd.developpement-durable.gouv.fr/rubrique.php3?id_rubrique=138.The residential property market in Ile-de-France and Paris inthe 2nd quarter of 2011 All the analyses and press conference pack can be found on the Notaires de France property portal  accessible at http://www.notaires.fr Contact: Olivier Pavy, Director of Economic Affairs – High Council for the Notarial Profession. Editorial Committee: Pierre Bazaille, Thierry Delesalle,Michel Pagès and Olivier Pavy. Published by: Conseil supérieur du notariat - 60 bd de La Tour-Maubourg - 75007 Paris - Tél. +33 (0)1 44 90 30 00www.notaires.fr. design and creation: Bureau de Création - ISSN : 2100-241X French property market report NOTAIREs dE FRANCE - N° 13 - October 2011

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