Photo credit: Christine â„¢
2012 was not a very good year for France's real estate, according to new figures. Sales of French property fell by 25 per cent, the FNAIM revealed, while prices also dropped in most regions.
Overall, values edged up 0.8 per cent, but the incremental rise hides significant variations across regions, with Brit favourites Normandy and Brittany suffering the biggest falls: prices in the two areas fell by 5.7 per cent and 5.3 per cent respectively.
Paris retained its strong real estate market, helping the region of Ile de France to record a price increase of 1.5 per cent, the biggest in the country. Other popular provinces, such as the Cote-d'Azur, Provence and Champagne also saw prices rise by 0.7 per cent. But decreases in Poutou Charentes, Pays de la Loire, the Midi Pyrenees and others mean that more areas in the country saw prices dip.
The negative outlook is cemented by the large fall in sales, with weakening demand attributed to financial concerns in the current economic climate.
The figures are backed up by TheMoveChannel.com's Top of the Props report from this month, which found that demand for French property on the portal fell in December to 9.31% - the country's lowest share of enquiries since November 2011.
"The fact that sellers are not prepared to bring down their prices to a level that buyers are prepared to pay" has also exacerbated the situation, economics professor Michael Mouillard told Property Wire. Indeed, the gap between asking price and eventual selling price has widened from last year to 5.42 per cent.
"We are in deteriorating economic climate. Only the very low bank interest rates have prevented the market from collapsing," added Mouillard.
The latest figures from Nortaires de France paint an equally negative picture, with resale prices of French homes falling in the third quarter of 2012 by 1.5 per cent.
Sales of existing homes also fell by 12 per cent from the year before to 730,000, according to estimates from the CGEDD Conseil Général de l'environnement et du Développement Durable (The French General Council for the Environment & Sustainable Development).
In greater Paris, sales were down by 21 per cent, while other regions saw a drop of 20 per cent.
And that downward trend is set to continue in 2013, with Notaires de France expecting the economic climate, a rise in unemployment, hesitant investors and a drive from officials to promote the sale of older properties will see demand and prices drop. The FNAIM concurs, forecasting home values to dip by 2 per cent this year, while Standard & Poor predict a fall of 5 per cent.
"In such circumstances, we can be certain that the volume of sales will not reach 600,000 and that it may well not even get above 550,000," adds the Notaires' report. "It will be even lower if vendors fail to lower their pricing expectations or if they choose to postpone the sale of their properties."
But there is good news for ski property investors: the one place in France where the trend is being bucked? The Alps.
In Morzine, prices per square metre for resort property jumped by 12.8 per cent compared to last year, while Meribel's values jumped by 15.1 per cent to reach €7,329 per square metre.
Demand, too, is climbing, with one resort in The Three Valleys prompting an avalanche of attention on TheMoveChannel.com thanks to a limited supply and .
Niclas Dowlatshahi, Managing Director of Leapfrog Propertie,explained:"It is extremely difficult, almost impossible, to get new building permits in The Three Valleys, so prices remain stable and in fact keep on rising. Properties in these sought after locations have held up well throughout the financial crisis because there simply is not enough to keep up with demand."
What do you expect from the French property market this year?
Browse our listings of real estate for sale in France, including ski property in The Alps:
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