the PDF - Notaires de France

French property
market report
No. 9 - november 2010
Analysis
■ The older property
market
The second quarter of 2010 was marked
by a clear recovery in the non-new build
property market: in terms of volumes of
sales the movement we expected last July
has mostly been confirmed; in terms of
price, the INSEE [French ONS] indexes
calculated in collaboration with the
Notaires de France are as follows:
INDEXES
NOTAIRESINSEE
(labelled
INSEE)
Over the three months prices rose
by 2.2% nationally and by 1.9% in the
provinces, and over one year by 6.3%
nationally and 4.3% in the provinces. The
difference was due to a sharp rise in the
Ile-de-France (8.6%), especially in Paris
(9.8%). Some départements were able
to take advantage of this turnaround,
such as Vosges (14.5%), Gard (11.7%) and
Charente Maritime (10.4%). The same
phenomenon was observable in urban
areas like Avignon which saw a rise of
19.9%, which was due to a strong increase
in the sale of small apartments, and also
in Lorient, Marseille, Annecy, Orléans
and Dijon.
Market of old apartments
Value of
the index
Market of old houses
Value of
the index
Variation*
Variation*
2010
Q1
2010
3
1
Q2 months year
2010
Q1
2010
3
1
Q2 months year
Metropolitan
France
210.1
214.8
2.2 %
6.3 %
181.3
185.4
2.3 %
5.7 %
Provinces
207.3
211.3
1.9 %
4.3 %
183.4
187.5
2.2 %
5.5 %
* 3 month variation: change between Q1 2010 and Q2 2010; * 1 year variation: change between Q2 2009 and Q2 2010.
The recovery in the older property market
is real. While price growth was very weak
at the end of 2009, even negative for
houses, the first quarter of 2010 saw a
rise, which was confirmed in the second
quarter nationwide. However, this rise
cannot conceal the reality in certain
départements: while the average change
is positive nationwide, this does not apply
across the board.
Apartments
The market is still falling in Ain (-10.1%),
Pas de Calais (-6.2%), Doubs and
Morbihan (-5.3%). Mulhouse was the
city that saw the steepest fall (-12.4%).
On the other hand, some départements
followed the example of the Alpes de
Haute-Provence (+22%).
Houses
The market is still negative in Lozère,
Landes, Deux Sèvres, Meuse, Allier and
Cher, with prices falling by 4% to 13%
over one year.
C o n ve rs e ly , t h e d é p a r te m e n t s o f
Gironde, Drôme, Loire Atlantique, Marne
and Seine Maritime saw double-digit
price increases. However, not everybody
has benefited from the recovery: rural
départements have found it very difficult
to get back to pre-crisis levels.
one-bedroom flats, continue to form
the overwhelming majority of new build
buyers.
The volume of sales of new property in
collective housing complexes continued
to increase in the second quarter of 2010
in comparison with the second quarter of
2009, rising by 5.7%. Prices per square
metre also rose, increasing by 5.4% over
the year to last June, giving an average
price of €3,556 (source: Fédération des
Promoteurs Constructeurs).
The volume of house sales in the second
quarter of 2010 rose very significantly – by
23.3% - in comparison with the second
quarter of 2009. However, the price per
square metre of houses in the second
quarter of 2010 fell over one year by
4.2%, giving an average price of €237,300
(source: Fédération des Promoteurs
Constructeurs).
The fact that house prices were more
subdued in comparison with units in
collective housing can be explained partly
by the fact that the accessibility norms for
disabled people are less restrictive in this
type of property, and partly by the fact that
the market is more competitive. Another
factor is that it is increasingly common to
leave the finishing touches to the buyer.
Whatever the case, in new and old
property, the changes vary enormously
from one region to another, as the maps
on page 3 show.
■ The new property
market
Rental investors, who buy mainly small
or medium-sized units, particularly
No. 9 - November 2010
Outlook
■ For older property
Last July we revised upwards the volume
of sales of old property in 2010, forecasting
that sales would be in the region of 700,000,
as in 2008. Now, in the month of October, it
seems that the actual figure will be much
higher than 700,000.
The volume of sales of old property for the
whole of 2010 is expected to be between
720,000 and 750,000. (Note: in the years
2000 – 2007 the range each year was
800,000 to 840,000 sales). Volumes in
central Paris are still below pre-crisis
levels, while the real estate market in the
Ile-de-France represents approximately
30% of sales of old property.
The 750,000 figure could even be exceeded
if a large number of sellers speed up
their decisions to sell in order to avoid
the higher rate of capital gains tax on
real estate, which is soon to be increased
from the current rate of 28.1%. Given the
current parameters, there is no reason
to think that this trend will be reversed
at the beginning of 2011: indeed interest
rates should remain low which will help
to keep buyers solvent. Prices in the most
dynamic provincial cities will continue to
rise, particularly for houses, although
they are not expected to reach the levels
seen in 2007. We seem to be witnessing a
«historical centre» effect, in which prices
rise significantly in certain areas, in both
Paris and the provinces. This factor may
be confirmed in coming months.
criteria will be significant, falling from 25%
to 13.5%, while for properties that do meet
the low energy consumption criteria, the
advantage will fall from 25% to 22.5% in
2011 (rate to be confirmed by the Finance
Bill 2011). However, this enthusiasm is only
observable in certain parts of the country.
Small urban areas can only look on from
afar, as investors are not interested in
local markets that do not seem promising
in the long-term. 2011 should be a less
impressive year, which the developers
seem to have anticipated. Indeed, in the
first eight months of 2010 there has been
a shortage of housing, with 6% fewer
developments begun in comparison with
the first eight months of 2009.
Will there be a change of attitude among
the developers due to the provisions of the
«PTZ plus» scheme (zero rate loans), which
appears to be extremely advantageous for
first-time buyers in urban areas?
■ For new property
In the few urban centres which are
economically and demographically
dynamic, 2010 will come to an end with
flying colours with respect to the promotion
of collective housing developments, which
should at least reach the volume of the
previous year, i.e. 110,000 new units sold.
There is no doubt that the rapid rise in the
number of sales off plan to be completed
before the end of the year can be explained
by the reduction in certain tax advantages
that will come into effect on 1 January 2011.
The reduction, as a result of the Scellier
Law, in the tax advantage for buildings that
do not meet the low energy consumption
Average price per sq. m. of older apartments
1 April 2010 to 30 June 2010
Rouen
€2,248
2.6%
Lille
€2,659
7.6%
Amiens
€2,102
2.5%
Reims
€ 1,954
0.9%
Caen
€2,029
-2.0%
Rennes
€2,069
3.4%
Tours
€2,123
9.7%
Nantes
€2,381
7.4%
ns
Strasbourg
€2,100
0.2%
Paris
€6,680
9.8%
Besançon
€1,651
-3.2%
Bourges
€1,325
3%
Poitiers
€1,503
6.6%
Limoges
€1,222
1.1%
ClermontFerrand
€1,455
1.7%
Bordeaux
€2,489
5.8%
Dijon
€2,097
5%
Lyon
€2,754
6.9%
Grenoble
€2,292
6.8%
Nice
€3,327
3.1%
Toulon
€2,219
2.8%
Annual change in price per sq. m.
Less than 0%
0% to 5%
5% or more
Nancy
€1,702
2.3%
Toulouse
€2,274
1.8%
NS = not significant (relevant statistics cannot be calculated due to the low volume of sales)
Source: Property databases of the Notaires de France (The prices in the Ile-de-France are
valuations based on the Notaires-INSEE indexes for Q2 2010). Outside the Ile-de-France, the
prices were calculated on the median volume of 150 transactions per city and per quarter.
Montpellier
€2,386
7%
Marseille
€2,388
6.2%
Average sale price of older houses
1 April 2010 to 30 June 2010
Rouen
€162,000
8%
Brest
€156,000
1.3%
Lille
€167,000
11.3%
Amiens
€140,000
-6.4%
Reims
€211,000
16.9%
Caen
€188,000
3.3%
Metz
€162,000
-10%
Tours
€195,000
3.3%
Nantes
€223,700
8.5%
Orléans
€200,500
13.6%
Poitiers
€155,000
7.8%
ns
Île-de-France
€287.400
6.3%
Lyon
€274,900
9.3%
Limoges
€135,000
8.9%
Grenoble
€308,750
2.9%
Bordeaux
€228,950
12.2%
Annual change in sale prices
Less than 0%
0% to 10%
10% or more
Toulon
€315,000
4.9%
Toulouse
€246,000
9.2%
NS = not significant (relevant statistics cannot be calculated
due to the low volume of sales)
Dijon
€220,000
15.4%
Saint-Étienne
€173,000
6.1%
Montpellier
€267,500
-8.2%
Source: Property databases of the Notaires de France (The prices in the Ile-de-France
are valuations based on the Notaires-INSEE indexes for Q2 2010). The prices given were
calculated on the median volume of 40 transactions per city and per quarter.
Marseille /
Aix-en-Provence
€290,750
7.7%
Price per sq. m. of new housing in the 2nd quarter of 2010 (apartments)
Haute-Normandie
€2,917
- 0.8%
Bretagne
€2,827
3.6%
Nord-Pas-deCalais
€3,179
2.2%
Picardie
€3,049
5.1%
ChampagneArdennes
€2,924
8.1%
Lorraine
€2,557
5.5%
Basse-Normandie
€3,360
3.8%
Alsace
€2,785
2.8%
Île-de-France
€4,588
8.5%
Pays-de-laLoire
€3,195
7.5%
Franche-Comté
€2,716
6.9%
Centre
€3,028
7.2%
Poitou-Charentes
€3,309
5.5%
Limousin
€2,546
1.2%
Bourgogne
€2,871
10.6%
Auvergne
€2,536
– 2.1%
Rhône-Alpes
€3,420
0.3%
Aquitaine
€3,198
5.3%
PACA
€3,984
4.4%
Annual change in price per sq. m.
Less than 0%
0% to 5%
5% or more
Midi-Pyrénées
€3,118
3.7%
Corse
€3,203
5.2%
LanguedocRoussillon
€3,293
2.8%
Source: FPC / ECLN/ CGDD/ SoeS
No. 9 - November 2010
Housing indices
France: a price index for non-new build housing in the whole
of France is calculated by the Notaires de France in collaboration with the INSEE. This index, which uses the hedonic pricing
method, is published quarterly. The data are taken from deeds
of sale provided by Notaires.
International comparison:
Index of housing prices
in relation to household disposable income
Base 2000 = 1
United States: the FHFA index is prepared by the Federal Housing Finance Agency, a US government agency. Using the repeat
sales method, it shows changes in the price of houses based on
a sample of mortgage loans.
United Kingdom: the DCLG index, the official price index for
housing, is published by the British government. It is based on a
sample of mortgage loans and uses the hedonic pricing method.
France
United States
United Kingdom
Source: CGEDD based on INSEE statistics, notaires’ databases, seasonally adjusted Notaires-INSEE indices, Freddie Mac, FHFA, R. Shiller,
US Bureau of Economic Analysis, Census Bureau, Bureau of Labor
Statistics, UK DCLG, UK National Statistics.
Graph may be downloaded from:
http://www.cgedd.developpement-durable.gouv.fr/rubrique.php3?id
Change in the sale price of apartments and houses
These maps show price changes from 2007
to 2010 for apartments and houses.
Apartments
The evolution of the price of apartments is
somewhat different from that of houses,
particularly after the 2008 crisis. In
predominantly rural départements, there
were markets before the crisis. These
markets have disappeared since 2009, as
current volumes of sales are not sufficient
to allow price statistics to be prepared.
It is clear that the house price correction
has allowed buyers to change their
aspirations in the relatively rural
départements and even elsewhere. Due
to the sharp increase in prices before the
crisis, many buyers could only aspire to
owning an apartment.
2007/2008
2008/2009
2009/2010
Houses
In order to check whether this shift is
confirmed in coming months, please see
our updates of this analysis.
Price changes
All the analyses and the press conference folder are available at
Notaires de France property portal, which can be accessed at
http://www.notaires.fr
More than 15%
From 10% to 15%
From 5% to 10%
From 0% to 5%
From -5% to 0%
From -10% to -5%
Less than -10%
Low volume
Source: Property database of the Notaires de France
Contact : Olivier Pavy, Director of Economic Affairs – Conseil supérieur du notariat (the High Council of French Notariat). Editorial committee:
Philippe Laborde, Pierre Bazaille, Thierry Delesalle, Michel Pagès, Olivier Pavy and Caroline Gaffet. Published by: Conseil supérieur du notariat 60 bd de La Tour-Maubourg - 75007 Paris - Tel: 01 44 90 30 00 - www.notaires.fr. Designed and produced by: Bureau de Création - ISSN : 2100-241X
No. 9 - November 2010