FRENCH PROPERTY MARKET CONDITIONS 2007
Market conditions - first half 2007
Market conditions have remained relatively steady coming through the first part of the year with the French property market having been tempered by caution preceding the presidential elections. The new government is now looking to encourage homeowners and tax breaks have been provided on interest payments on principal homes. There has been talk of principal homes being exonerated from ISF. These factors are expected to have a positive influence on the market. Dispensable household income is on the increase. The supply of property on the market remains high however and will help to temper excessive growth. We currently expect house prices to rise around 6% through 2007.
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2001 average prices realised : 1 296 euros / m² in the SW.
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2006 average prices realised : 2 025 euros / m² in the SW. Average across France for the same period 2 581 euros/m²
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2006 finished the year showing a growth of just over 7% for the year. (Source FNAIM).
The most expensive areas included the (ĂŽle-de-France, Provence-Alps-CĂ´te d’Azur, RhĂ´ne-Alpes, Aquitaine, Languedoc-Roussillon) and most neglected included the (Limousin, Auvergne, Franche-ComtĂ© and Lorraine) where bleak economic outlook, a lower quality of life and less social and cultural infrastructure were cited as the main contributing factors.
The supply of properties for sale remains high in the latter part of the year. Following a wave of articles expressing a negative outlook for the market, sellers are currently realistic with regard to the pricing of properties. We are concerned that this trend will not last for long. We have found there to be substantial movement of property at all price levels going in to the last quarter. I am convinced that there is a window of opportunity for purchasers at the moment as I am expecting market prices to surge upward in the early part of 2007.
The cost of new build has crept upwards and the price of building land has risen dramatically during the course of the year. This is putting further pressure on resale.
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