State of the Real Estate sector in France.

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Image credit to Les Echos, Fnaim.

The number of transactions on existing homes rose nearly 16% in 2015, while prices have stopped falling and have even experienced a net increase.

The market for existing homes will have a bang during 2016.

“We should finish 2015 at about 800,000 transactions, against 692,000 in 2014, almost 16% more” said Jean-François Buet, president of the Federation of Estate Agents (FNAIM).

The recovery has proven in all regions. The record is held by Britain (almost 20%, but from the bottom), when even the worst performing region, Corsica, rose 4.8%. The Ile-de-France is in the average (16.6%). The FNAIM percentages do not distinguish urban from rural.  The second-home market has also awakened.

Rents declined last year everywhere in France (-1.3% and -0.8% in the provinces in the Ile-de-France), also says FNAIM.
Real Estate prices rose 2.2% in the fourth quarter 2015 in Provence and by 0.7% in the Ile-de-France.  For 2016, the FNAIM forecast said the prices will be stable, with at least 700,000 transactions.

The recovery could falter if prices were to rise. Another limitation is the nature of the requested goods, which does not match the offer. The large main homes remain unsold. “The heart of the market are medium-sized housing in urban areas,” says the President of the FNAIM, observing that, “overall, the average basket is not higher than in 2014 “.

Thus, there is a return of the first buyers, but always for real estate from 100,000 to 150,000 euros.

In these conditions, “the recent extension of zero-interest loan does not change the situation on the demand for first time buyers. It will just be a windfall for those who would otherwise have purchased the old house with work, “said Jean-François Buet.

Finally, the price disparities remain impressive. Paris was worth 8413 euros per square meter at the end of 2015, Lyon, Bordeaux, Lille and Ajaccio square meter more than 3,000 euros, while Limoges, Poitiers or Clermont-Ferrand were less than 2,000 euros per square meter.

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