French Property Market in June Performs well but Shows Signs of Slowing
While most major cities are still performing strongly, figures for the French property market in June indicate the market is slowing after the explosive first few months of 2017.
The month of May saw growth across the board in France’s 10 biggest cities, something rarely seen in Meilleursagents’ monthly barometer of the French property market. This was despite – or thanks to? – the presidential election at the beginning of the month.
Prices grow but not as fast
Over June, Paris (+1%) and Bordeaux (+0.8%) continued their strong performance but growth was lower than during the month of May (see table below). Half the cities saw slows in growth month-on-month, compared with only one during May. A stand-out performer is Strasbourg, whose growth accelerated in June and is now the second-best performer over the last 12 months behind Bordeaux.
Falls were back too. Montpellier and Lille saw falls of 0.5% and 0.1%, respectively, though they have both consistently struggled in 2017. Since January, Montpellier’s property prices have fallen 0.7% while Lille has experienced a slight fall of 0.2%. See the agglomerated table of Seloger and Meilleursagents price stats for June below.
|City||June (MA)||May (MA)||Year so far (MA)||Last 12 months (MA)||Last 12 months,|
apartments only (Seloger)
|Finishing Price/m2 in apartments (Seloger)|
Buyers continue to lap up cheap credit
Meilleursagents cite Macron’s election helping to maintain low interest rates by keeping the government’s Treasury yields low. From 1.2% before the election, the OAT average is now 0.7%, though still significantly higher than the lows of 0.1% seen in summer last year.
Mortgage rates remain around 1.8% for 20-year loans, so it remains an opportune time to finance. This is hugely benefitting some cities outside the top 10, who have seen double-digit growth in the past year:
- Nimes: +14.0%
- Le Mans: 12.9%
- Besancon: +12.7%
- Tours: +11.2%
Nationwide figures look good
According to Seloger, the nationwide annual growth figure for existing properties is the highest it has been since May 2012, when the prices began to fall drastically. They do note that the 3-month change figures are lower than those in the same period last year and in 2015.
|Existing Property, Advertised Price||Existing Property, Agreed Price||New-builds, Agreed Price|
|All properties, price/m2||€3,349||€3,394||€4,053|
|Houses only, price/m2||€2,872||€2,939||€2,509|
|Apartments only, price/m2||€3,749||€3,775||€4,708|
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