With 970 thousand residential properties sold in France last year, excluding new builds, a new record has been set. This is 14% more than 2016 and 30% above the 10 year average according to a study from the Credit Foncier this week. The same is true for new builds with 419 thousand new properties in 2017, representing also 14% increase over the previous year. The exceptional number of sales was due to the very low interest on house loans, as well as various government incentives to help investors and first time buyers.
Looking more closely there are in fact 3 housing markets in France that follow different trends:
- The urban property market is the most dynamic, with now a real shortage of properties within or close to city centres resulting in the ongoing increase in prices in certain cities.
- For the luxury property market agents like Sotheby’s and Barnes recorded 38% and 15% increase in sales in 2017 compared to the previous year respectively. This is perhaps due to the “Macron effect” with the removal of wealth tax or “ISF”. So this market is now recovering from below average performance.
- In rural areas there is still an overabundant stock of houses for sale compared to demand, so this market segment will continue to present good opportunities for buyers, with prices often below those of 2008.
For 2018 the volume of sales is expected to stabilize close to the high level of 2017.
The “France is back” trend will see more international buyers coming to enjoy French lifestyle, or escape the uncertainty generated by Brexit, so positive news overall is in store for the property sector in France!