French house prices and sales volumes decline in second quarter of 2012

[Sprogster]

The official second quarter figures for French house prices are out and it not surprisingly reflects a slowing market and falling prices, with some areas like Pouitou-Charentes down 13.8% over the last three months! Upper and lower Normandy is also showing a double digit decline, which seems to indicate that rural areas favoured by Brits seem to be suffering the most.
There is a rare general consensus amongst banks, notaires and immoblier associations that the market is slowing and prices are falling and will probably continue to do so over the next three to four years, as apparently average French house prices are still overvalued.
The good news is that a collapse in prices is not anticipated, more of a slow correction, although rural areas that are dependent on foreign buyers could be more vunerable.
For those thinking of buying time appears to be on their side and those thinking of selling probably need to make a decision sooner rather than later.
I can add a link to the stats and overview report but it is contained in a French property website, so not sure I am allowed?

[Quillan]

Do they say where the data comes from? Perhaps we could link to the original source. You could PM me the link and if it looks like just the stats it may be OK to place the link.

[Sprogster]

Quillan, just pm'd you the link.

[Quillan]

Thanks, I don't see why we can't allow the link, we have had one before from this site that shows general information.

http://www.french-property.com/news/french_property_market/house_prices_q2_2012/

 

[Aly]

I am not sure how real these figures are. They don't take account of properties that just do not sell. Or those that hang on hoping for an improvement. In our area the agents are closing down, the same properties are in the windows that were there last year.

[Quillan]

If the figures were from an independent source then they would be more believable but as much of the statistics are from actual agents it's a bit difficult. Having said that there is loads of stuff for sale down here but much of it is not moving. Ten years ago when we bought it was the same, our house had been on the market for nearly two years. At the moment the more expensive stuff still moves OK i.e. over €350k as people looking at those house prices normally have the money. As an example there was a place for sale for €1.5M and it was only on the market for 10 days.

[Sprogster]

I take the view that immoblier associations are conflicted in that it is in their members interests to talk up the market, so on balance their reports will be on the optimistic side.

It seems that the optimists are talking about a reasonably stable market with a gradual decline in house values over the next few years, and the pessimits believe there still could be a more fundamental correction.

At the back of my mind I have the thought that the French socialist government would welcome more affordable house prices, so a decline could well suit their political aims.

[andyh4]

Aly the numbers are completely believeable.  They reflect the sales price (not the asking price) and if a house has been on the boards for 2 years it has not sold and cannot be part of the analysis.

There are some interesting regional differences and you can also get the average size of a property in each of the regions - 69m² in PACA rising to 97m² in PC. 

 

Perhaps most surprising is the juxtaposition of adjacent Alsace and Lorraine (+7,9% versus -9,1%).  I wonder if that is a TGV effect, with the southern half of Alsace now high speed linked to Paris, whereas Lorraine was linked about 5 years ago and maybe the shine has rubber off.

[Pommier]

I think that it's all down to location. We've just sold our house in under 4 weeks for over 16% more than we paid for it, even after notaires and immo fees. The 'net vendeur' price rose by just under 25%. We bought the house just under 3 years ago.

If a house has been for sale for 2 years then it's overpriced.

[NormanH]

But it was a lovely house and perfectly situated..

[Aly]

 Look at all this lot -  just guest houses - many are  probably non French  owned as seems indicated by the site and text.

http://france.businessesforsale.com/french/search/Guest-Houses-and-Bed-and-Breakfast-Businesses-for-sale

[andyh4]

Looks like a lot of Brits who have decided that Mandy Lamb was wrong and you cannot make a living out of a Gite or a 2 bed B&B.

 

However that is a slanted (Mainly UK) view of the entire French market - which is what the OP was referring to.  The entire French market of course includes a lot of French people looking for a simple house close to where they work.

 

That market does then project onto the foreign buyer market, but I am going to suggest that at present it is the local market driving the foreign one rather than the other way round.

[Quillan]

I think your right Andy.

I think the figures are a bit suspect i.e. I think prices have propped more than they are saying. If you have agents involved they will want to show that they can get the prices the sellers want and sell quickly to propote their business above the rest. I am more likely to believe figures from Notaires than I am the agents.

The market where I live is depressing prices. The rumor amongst the French is that many Brits want to go back, high food prices, weak Pound etc and they are making offers well below the asking price and it would seem getting them as well. Perhaps they view it as 'pay back' as in their eyes the Brits have driven prices up to a figure they could not afford so now they can drive prices down.

I remember reading in a thread that there are loads of B&B's for sale up north and it's the same down here. Most of them are owned by Brits who as you said thought they could survive on a two room B&B and after all it's an easy life running one (Yeah right). Most have suffered badly this year especially as many only advertise to the English speaking market and the UK in particular. In hindsight I made the right decision a few years ago and created a seperate website aimed at the French speaking market otherwise I would have found it difficult to survive.

[P-D de Rouffignac]

The problem with the figures, whatever their source, is that they based on averages and generalisations, when - as has been pointed out - areas and types of property differ widely, and no two properties are the same.

As an example, where I live, overall property sales are down largely because the housing stock comprises 70% second homes (official figures), including large numbers of holiday apartments. Figures for overall property sales (all of France) show that only around 7% concern second homes, when clearly in my area (the Mediterranean coast) the percentage of second homes offered for sale is much higher. There is accordingly a glut of second home properties on the market, and fewer sales.  Prices have not dropped significantly however (see the figures in the survey quoted in this thread), even though:

1. The majority of second homes are sold within 10 years of purchase (children grow up, decline of the seaside holiday, rental income declines etc)

2. Many of these holiday homes date from the 1960s and 1970s and require serious renovation (sound and heat insulation, plumbing, electrics etc)

3. The Sarkozy tax changes (CGT) make second homes less attractive as an investment.

4. In a crisis, a second home can hopefuly be turned into ready cash, so more people put them on the market.

In contrast to the above, there are huge new housing developments springing up - 3 and 4 bedromm permanent family homes - all sold and occupied within months.  In spite of the area being known for its high unemployment it is one of the fastest growing in France!

I think the above small example show that you have to study local housing markets and local prices in some depth before reaching any conclusions that can be applied more widely.

[powerdesal]

''Perhaps they view it as 'pay back' as in their eyes the Brits have driven prices up to a figure they could not afford so now they can drive prices down.''

It's an odd viewpoint isn't it ?

Buyers deciding to pay a higher price than the seller is actually asking ( British buyer - French seller ), I wonder what planet that scenario actually happens on.

[Quillan]

When we first came the house prices went up and up because to Brits the prices were cheap and they were willing to pay. Our house went up 100% per year for four years now it's value is more realistic. I know for a fact that some French asked more than the house was worth in French terms because they knew the Brits would pay. Now there is not so many Brits buying houses people are setting the price to sell and being that it is more likely a French person will buy they are asking a more realistic price which is lower.

[NormanH]

Last time I said this I was shot down by a poster I suspected to be an estate agent who hasn't said a lot since, but for a while, say 2000-2008 there was definitely a price for 'les Anglais'.

Not that more could be asked of one person rather than another , but that properties were absurdly over-valued, and those prices were paid by foreigners who didn't know the normal market price.

If a French buyer came along with a more realistic price the offer was accepted once it was pretty certain that there were no mugs around.

I bought my present place for half the price of some English people round the corner who only lasted a few years in this rough neighbourhood, and I remember the guffaws that greeted the news of the price the place had fetched.

That is what is meant by driving up prices: of course the seller set the price, but never would have asked it if there hadn't been  someone out there fired up by TV programmes about the quality of life and cheap living..

[Aly]

I agree with most comments. The other factor is that most of us purchased older properties and then spent time and money renovating them.

These renovations add little to property values. The factors that drive the market back home, character, views, style, decor have little value in most places in France here the locals prefer a new build on a small estate. It will be interesting to see if prices fall further in the coming months.

[powerdesal]

It does seem rather odd though, to blame the buyers for meeting the sellers price. It would be more logical to blame the seller for ''pricing the locals out of the market'', but of course it's far easier to blame the incomers than to blame your neighbour / relative / friend etc.

The same scenario occurs in Wales where the very people who sell the houses then blame the buyer for buying them.