French Real Estate Downtrend
Capital.fr’s Guillaume Chazouillères analyses the current price deceleration affecting the French real estate market. New figures published by Century 21 seem to confirm this trend.
The first market corrections observed during late 2012 spread gradually to all local real estate markets. During the first quarter of 2013, more than half of the French regions have seen their prices lose ground, according to data provided by Century 21 in Capital.fr.
The areas most affected include the Upper Normandy (-12.8%), Champagne-Ardenne (-5.2%), the Pays-de-la-Loire (-5.1%), Auvergne (-5.1%) or the Languedoc Roussillon (- 4.9%). One major highlight: the decline is now also palpable in Paris, where housing prices fell 3.4% in the first quarter in comparison to the end of 2012 (8106 euros per square meter).
Many saw this coming. Indeed, faced with rising unemployment, first-time buyers have been particularly scarce in recent months. “With cooling economic conditions, the number of investors willing to buy in order to rent has also declined by more than 10% year over year,” says Laurent Vimont, president of Century 21.
But even in this less-than-opportune context, nine regions were able to successfully resist, such as the Midi-Pyrenees (7.6%), PACA (6.2%) or Burgundy (+ 5.6%) … But these figures should be treated with caution: in most cases these regions are barely catching up, since most of them had already accused steep declines last year. Besides, real estate owners will be forced to make concessions in coming months. In fact, according to projections compiled from recent notary sales records, house prices could fall by 7% on average by May across the whole territory of France.