French property - Chambre des notaires de Paris

French property
market report
N° 18 - JANUARY 2013
INSEE (French
National
Statistics &
Economic Studies Institute)
and Notary
indexes
Mainland
France
Second-hand apartments
Index value
Variation*
Second-hand houses
Index value
Variation*
2012
T2
2012
T3
3
months
1
year
2012
T2
2012
T3
3
months
1
year
113.8
115.0
1.1%
-0.5%
105.6
107.5
1.8%
-1.5%
Greater Paris
121.3
123.0
1.4%
0.3%
110.0
111.6
1.5%
-1.2%
French provinces
106.9
107.7
0.8%
-1.3%
104.7
106.6
1.8%
-1.5%
*3-month variation: development between 2012 Q2 and 2012 Q3 *1-year variation: development between
2011 Q3 and 2012 Q3.
Analysis
■ T
he market for older
properties
In volumes
According to estimates from the CGEDD(1),
sales of older properties stood at 730,000 in
late September 2012, i.e. a fall of 12% over a
year. Since March 2012, the number of sales
calculated over the last 12 months has fallen
by an average of 2% each month compared to
the previous 12 months. Over the third quarter
of 2012, our estimate for the French provinces
reveals a fall of 20% over a year, compared to
16% the previous quarter. In the greater Paris
region, a similar pattern can be observed: during the third quarter, 37,700 homes were sold,
i.e. 21% fewer than in the third quarter of 2011.
The slide continued over the three months from
August to October, with 31,600 sales.
Prices
According to the NOTAIRES-INSEE index, apartment prices fell by 0.5% and those of houses
by 1.5% (year-on-year) in the third quarter of
2012 for the whole of Mainland France. Taking
just the French provinces together, the prices
of older apartments and older houses have
suffered a similar fall (1.3% and 1.5% respectively) over a year. Only apartments in the greater
Paris region have seen their prices increase (by
+0.3%) while the prices of houses have fallen
back by 1.2%.
Between the second and third quarters of 2012,
prices increased to a degree slightly below that
generally witnessed at this time of year: the
index figures corrected for seasonal variations
published by the Insee - which are designed to
reduce the impact of these effects - are down
overall by 0.1% (with apartments falling by
0.2% and houses remaining stable).
In the greater Paris region, prices continued
to hold up in October, with the quarterly price
development of older homes (all types) being
+0.1% (+0.4% for apartments and -0.4% for
houses). On the same date, the annual development was -0.5% (0% for apartments and
-1.7% for houses). In Paris, the price of apartments rose by 0.4% in a year, while house
prices fell in all the départements comprising
the region (between -1% in Seine et Marne and
in Val d’Oise, and -2.9% in Seine-Saint-Denis).
In the French provinces, in the third quarter
of 2012 two départements out of three were
showing developments of between -5% and
+5%. Increases in excess of 5% were rare.
These concerned five départements for houses
(Charente maritime, Haute-Loire, Vosges,
Deux-Sèvres and Haute-Marne) and five others
for apartments (Haute-Vienne, Haute-Corse,
Hautes-Pyrénées, Lot-et-Garonne and Gard).
For the same département, apartments and
houses are not necessarily going in the same
direction. As an example, Aude, Drôme and
Eure-et-Loire are all posting price rises for
apartments and falls for houses. The opposite
phenomenon is also observed, for example in
the Bouches-de-Rhône, Charente Maritime
and Alpes-Maritimes.
For the main towns (districts) and urban areas
in the French provinces, the developments are
also mostly situated between -5% and +5%.
Sharper falls are nevertheless noted, for apartments in certain towns such as Caen (-10%),
Besançon (-8%) or Nîmes (-8%) and for houses
in the urban areas of Limoges (-10%), Brest
(-9%) and Dijon (-7%).
The advance indicator derived from option
agreements is showing a downward trend for
the prices of apartments and houses in the
French provinces and a stabilisation in prices in
inner Paris for 2012 and early 2013.
■ The new housing market
According to the ECLN survey (Enquête Commercialisation des Lodgements Neuf – New Homes
Marketing Survey), for the third quarter of 2012,
the volume of sales of new homes is 25% lower
than that of the third quarter of 2011. One quarter
ago, the fall over a year was only 14%. The stock
of apartments proposed for sale is slightly up and
is equivalent to 4.3 quarters of sales. On the other
hand, the proportion of stock actually completed
remains at a very low level, equivalent to 4.3% of
the total stock. According to the Fédération des
Promoteurs Immobiliers, prices have increased
only slightly over a year (+1.2%).
According to the Markemétron newsletter (a
market report examining sales of non-project
houses) the number of transactions concerning
non-project houses up to October 2012 was down
by 17% over a year.
As for the construction of new properties, the
number of authorisations fell by 5.5% quarter on
quarter up to late October and that of new housing starts by 19.3%. Over a year, the development of authorisations was up (2.1%) but that for
housing starts was down overall (-5.7%). Houses
are sharply down, both for non-project (-11%) and
project houses (-13.1%) while the apartment sector is holding up (+1%).
The availability of credit
According to the Observatoire Crédit Logement
(housing loan monitoring group) / CSA, the distribution of housing loans to domestic clients in
2012 is sharply down on the previous year. The
fall totalled 32.6% year-on-year over the first 11
months of the year.
Interest rates have however continued to fall. The
average level in November was 3.31%, (i.e. 3.35%
for new properties and 3.26% for older ones).
Since March 2012, their decline has totalled 64
base points for an identical period of 208 months.
(1) Conseil Général de l’environnement et du Développement Durable (The French General Council for the Environment
& Sustainable Development): calculations by J. Friggit based on the databases of the DGFiP and of Notaires de France.
French property
market report
Notaires de France - N° 18 - January 2013
Outlook
■ For older properties
Volumes in the market for older properties, which
usually stand at an average of around 800,000
transactions per year, should see 2012 ending
somewhere between 650,000 and 700,000 sales.
The risk of a year-end figure of fewer than 650,000
seems to have receded. In a number of very specific
cases, the reduced taxation of real estate capital
gains will have no impact as it is limited to building
land. The only cause for concern is that the fiscal
instability which generated something of a frenzy
in 2012 and the various ideas which have been put
forward during the budgetary debates may have
put some buyers off.
For 2013, three additional factors will contribute
to a further fall in the number of transactions: the
economic outlook, with low growth bringing about an
unavoidable rise in unemployment, a wait-and-see
attitude on the part of potential buyers in markets in
which a downturn is not yet fully underway and the
absence of any state aid for the acquisition of older
properties, with the exception of sensitive urban
areas. In such circumstances, we can be certain
that the volume of sales will not reach 600,000 and
that it may well not even get above 550,000. It will
be even lower if vendors fail to lower their pricing
expectations or if they choose to postpone the sale
of their properties. A new loss of tax revenue for
the départements and districts is therefore a very
real risk. Overall this should be of a lower scale
than in 2012, but the number of local authorities
suffering both a decline in volumes and prices could
be higher in 2013.
The scenario of a simultaneous rapid fall in prices
and volumes occurred in 2009 but this was an
exception. On the contrary, as a general rule, falls
in prices are not only usually «out of sync» with
those in volumes but furthermore they tend to be
spread over several years. This is what happened
in the 1990s. This is also the conclusion reached
by the OECD based on their observation of several
dozen property cycles in all member countries: the
prices (in real terms) increased on average by 20%
over six years before falling back by 26% over five
and a half years.(2)
■ For new properties
The volume of sales by property developers in
2012 should be closer to 70,000 than 75,000. The
«tax incentive» effect due to the looming end
of the Scellier scheme will not occur, due to a
postponement of its demise until late March 2013.
What’s more, it would not have been particularly
significant in scale. There is no reason for the
perspectives for new homes in 2013 to be any
better than that for older properties. Sales prices
will suffer the effects of the introduction of the
RT2012 standard. To this should be added that
of a realignment vis-à-vis sales to social housing
bodies, whose relative size will increase due to
the «scissor effect» underway between social
accommodation and the private sector. The first
is supported by governmental production targets
and the increasing of the threshold in the major
urban areas. The second is hampered by the
economic climate and the real estate situation
described above. As for sales to investors,
these should be fewer in number than in 2012,
so it remains difficult to establish the level of
attractiveness of the Duflot scheme.
As for the construction of private houses, this
tends to be less sensitive to the fiscal environment
but more so to the economic environment and
property support schemes. The full details of
the revised zero rated loan are still not yet all
known. It is therefore difficult to issue any opinion
concerning its impact and to estimate whether
the improved repayment terms for less well-off
families will offset the lowering of the revenue
ceiling (€36,000 instead of €43,500 in zone A).
(2) “The role of the fundamental indicators in the recent
changes in house prices” in “OECD economic outlooks”
no.78 (December 2005).
Median prices per sq.m of older apartments in the third quarter of 2012
Developments over a year: 1 July 2012 to 30 September 2012 / 1 July 2011 to 30 September 2011
Lille
3 130 €
-2.1%
Rennes
2 460 €
4.8 %
Caen
2 050 €
-10.3 %
Amiens
2 310 €
-3.9 %
Rouen
2 310 €
-7.5 %
La
Guadeloupe
2 860 €
La Martinique
2 420 €
-9.3%
La Réunion
2 270€
-8.6 %
Annual changes,
prices per sq. m.
Less than 0 %
From 0 % to 5 %
5 % and more
Orléans
2 090 €
-1.0 %
ClermontFerrand
1 600 €
-0.6 %
Bordeaux
3 040 €
4.6 %
Bayonne
2 660 €
-1.3 %
Nîmes
1 750 €
-8.3 %
Besançon
1 770 €
-8.5 %
Dijon
2 140 €
-1.9 %
Saint-Étienne
1 210 €
-7.5 %
Poitiers
1 630 €
-0.1 %
Strasbourg
2 390 €
-3.1 %
Mulhouse
1 190 €
1.7 %
Nantes
2 660 €
0.8 %
Limoges
1 320 €
5.5%
Nancy
1 890 €
-3.3 %
Paris
8 440 €
0.8 %
Tours
2 380 €
4.9 %
La Guyane
ns
Reims
2 110 €
-5.5 %
Metz
1 850 €
-1.9 %
Lyon
3 280 €
1.1 %
Grenoble
2 370 €
-5.3 %
Nice
3 740 €
0.9 %
Toulon
2 290 €
-6.2 %
Toulouse
2 500 €
-2.9 %
ns = not significant (the volume of sales is insufficient to calculate relevant statistics) Source:
Property databases from Notaires de France (the prices for greater Paris are a valuation of the
notaries’–INSEE index for the fourth quarter of 2011). Excluding greater Paris, the prices have
been calculated based on a median volume of 150 transactions per city, per quarter.
Montpellier
2 680 €
2.5 %
Marseille
2 500 €
-3.1 %
Haute-Corse
2 450 €
6.0 %
Corse-du-Sud
2 710 €
-7.2 %
Median sales prices of older houses in the third quarter of 2012
Developments over a year: 1 July 2012 to 30 September 2012 / 1 July 2011 to 30 September 2011
The statistics for houses concern the whole urban area (town centre + suburbs)
Le Havre
191 100 €
5.3 %
Brest
170 000 €
-9.1 %
Caen
218 000 €
-2.5 %
Tours
230 000 €
0.0 %
La Guyane
La Guadeloupe
ns
La Martinique
240 000 €
Chartres
210 000 €
-4.5 %
Angers
219 000 €
-1.4 %
Bordeaux
258 300 €
-0.7 %
Less than 0 %
From 0 % to 10 %
10 % and more
Metz
192 100 €
-4.4 %
Orléans
204 000 €
-4.2 %
Châteauroux
117 000 €
-1.3 %
Poitiers
165 000 €
-2.1 %
Toulouse
281 000 €
0.4 %
Nancy
181 000 €
-6.7 %
Troyes
163 000 €
0.6%
Dijon
219 000€
-7.2%
Saint-Étienne
190 600 €
-5.6 %
Lyon
328 800 €
4.4 %
Limoges
142 000 €
-10.0 %
Montauban
179 900 €
-0.1 %
Reims
218 000 €
-1.4 %
Île-de-France
311 400 €
-1.2 %
Nantes
256 500 €
-1.3 %
La Réunion
200 000 €
0.0 %
Annual change in
prices
Lille
190 500 €
3.9 %
Amiens
164 200 €
0.1 %
Rouen
179 000 €
2.9 %
Grenoble
312 500 €
-2.0 %
Nîmes
240 000 €
10.1 %
Toulon
363 500 €
-1.8 %
Montpellier
318 000 €
1.8 %
ns = not significant (the volume of sales is insufficient to calculate relevant statistics)
Source: Property databases from Notaires de France (the prices for greater Paris are a valuation
of the notaries’–INSEE index for the fourth quarter of 2011). Excluding greater Paris, the prices
have been calculated based on a median volume of 150 transactions per city, per quarter.
Haute-Corse
216 000 €
-5.7%
Marseille /
Aix-en-Provence
319 800 €
1.9 %
Corse-du-Sud
270 000 €
-14.1 %
Average prices per m² for new apartments in the third quarter of 2012
Developments over a year: 1 July 2012 to 30 September 2012 / 1 July 2011 to 30 September 2011
Haute-Normandie
3 051 €
-2.8 %
Bretagne
3 178 €
0.1 %
Nord-Pasde-Calais
3 055€
-8.4 %
Picardie
2 987 €
-21.7 %
ChampagneArdennes
3 218 €
-1.5 %
Lorraine
2 455 €
-9.0 %
Basse-Normandie
4 038 €
10.5 %
Alsace
2 970€
-4.1 %
Île-de-France
4 687 €
-5.7 %
Pays-dela-Loire
3 368 €
1.4 %
La Guyane
La Guadeloupe
La Martinique
La Réunion
ns
Franche-Comté
2 811 €
2.5 %
Centre
3 172 €
3.2 %
Poitou-Charentes
3 637 €
0.6 %
Limousin
2 616 €
-6.2 %
Bourgogne
2 954 €
6.6 %
Auvergne
2 939 €
0.9 %
Rhône-Alpes
3 729 €
0.3 %
Aquitaine
3 589 €
2.5 %
PACA
4 429 €
4.2 %
Annual changes,
prices per sq. m.
Less than 0 %
From 0 % to 5 %
5 % and more
ns = not significant (the volume of
sales is insufficient to calculate relevant
statistics)
Source : FPI / ECLN / CGDD / SOeS
Midi-Pyrénées
3 356 €
2.2 %
Corse
3 366 €
-1.2 %
LanguedocRoussillon
3 637 €
5.9 %
French property
market report
Notaires de France - N° 18 - January 2013
Housing indicators
France: The all-France price index for older
housing is calculated by Notaires de France
(French notaries) in partnership with the INSEE
(French National Statistics & Economic Studies
Institute). This index is published on a quarterly
basis and uses the hedonic pricing method.
Data are derived from deeds of sale submitted
by the notaries.
International comparison:
property price index compared
to the income available per household
Base 2000=1
France
United States
United Kingdom
United States: The FHFA index is drawn up
by the Federal Housing Finance Agency, an
organisation affiliated to the US government,
which measures the development of prices
for houses based on a sample of mortgages.
It uses the repeat-sale method.
United Kingdom: The DCLG is the official
price index for housing published by the British
government based on a sample of mortgages.
It uses the hedonic pricing method.
Source: CGEDD, from the INSEE, notarial databases, deseasonalized INSEE and notary indexes, Freddie Mac, FHFA, R.Shiller, US Bureau of Economic Analysis, Census Bureau, Bureau of Labor Statistics, UK DCLG, UK National Statistics.
Graph downloadable at: http://www.cgedd.developpement-durable.gouv.fr/rubrique.php3?id_rubrique=138.
The real estate market as a whole has not escaped the economic crisis as
demonstrated by a fall in the number of transactions, which began several months
ago. However, we are seeing neither a brutal downturn nor a major slide in prices.
In an economic crisis and a climate of fiscal instability, how can a market as large
as that of the real estate sector escape the
general downturn?
However, the market for mountain properties
seems to have stood up quite well, seemingly proving that second homes, which by
their very nature are less essential than first
homes, continue to exercise an attraction for
buyers, bringing with it increasing numbers
of foreign buyers and a drift towards the top
of the range, upon which the main resorts
and not only Courchevel or Val d’Isère now
appear to be focusing with their future plans.
This is the main factor explaining this economic paradox.
The winter sports clientele is often a wealthy one and people are now increasingly
looking not only to Europe but to the rest of
the world to capture new markets even if the
lack of snow sometimes limits the number
of tourists, as was the case in the winter of
2006/2007.
It must be acknowledged that over the years
the quality of new buildings and better space
usage have led to the construction of apartment buildings and chalets which are environmentally friendlier and more in keeping
with the traditional feel of Savoyard villages.
The renovation of older properties, the
conversion of barns or mountain farms in
areas where real estate is in short supply,
combined with the construction of luxury
chalets are all good reasons to live in the
mountains, for easy access to the activities
on offer. More than just snow and skiing,
the attraction is actually the mountain as a
whole, its living environment and its traditions which are the main attractions for an
ever more demanding clientele.
spent in the départements of Savoie and
Haute-Savoie.
Without a doubt, Savoie benefits first and foremost from the mountain and winter sports
market.
Will the market for rental
properties provide a boost for the
Alps?
Although Haute-Savoie, which
is situated within easy reach of
Switzerland and Geneva, has
retained a significant industrial
base alongside its mountain
resorts, Savoie is proud to
vaunt the sheer prestige of
its resorts and ski areas to
the whole world, all factors
which have made it deservedly famous.
The expenditure of skiers
and those accompanying them
has been assessed for all resorts in
the Rhône Alps region at more than
€6 billion and more than 85% of this is
You’ll find the complete press kit for the mountain real estate market at notaires.fr
Contact: Olivier Pavy, Head of Economics Affairs - Conseil supérieur du notariat. Editorial committee: Bruno Delabre, Philippe Laborde,
Olivier Pavy et Claude Taffin, Scientific director of DINAMIC. Published by: Conseil supérieur du notariat - 60 bd de La Tour-Maubourg - 75007
Paris - Tél. +33 (0)1.44.90.30.00 - www.notaires.fr - Design and creation: Bureau de Création - ISSN : 2100-241X
French property
market report
Notaires de France - N° 18 - January 2013