French Towns Where House Prices are Falling: Where and Why?
While the French property market’s recent recovery since the stagnant years of 2012 to 2015 is welcome news, not all regions are seeing growth. What about the French towns where house prices are falling?
Even a presidential election wasn’t able to put a halt to the startling property price growth in France seen so far in 2017. Having said that, not all towns have shared in the fruits of the price growth, possibly making them more attractive to the thrifty property buyer.
One of the most notable is Perpignan. According to Seloger’s statistics for May, the southern city that lies close to the Mediterranean and the Spanish border has seen its property prices fall 9.5%. It remains a popular tourist attraction and widely revered place of interest amongst the French, yet a consistently weak local economy since the Financial Crisis means prices have fallen below €1,500 per m2.
Analysis from two years ago highlighted inauspicious economic indicators, including median household income well below the national average, double the average ratio in French towns of unemployment benefit claimants per 1000 inhabitants, and a 30% rate of unemployment in the town centre. These indicators might have improved since but clearly not enough to rejuvenate the housing market.
Major towns in Normandy are also faring less well. Both Le Havre (-3.7%) and Rouen (-2.4%) have seen prices fall over the last 12 months according to Seloger. Unemployment in the region remains stubbornly high, especially in a port town like Le Havre which is more susceptible to the effects of a struggling wider economy.
Elsewhere, Limoges (-2.2%) and Saint-Etienne (-4.9%) are the other major cities seeing falls. When trying to figure why these cities, in particular, are seeing falls while other major cities are growing month-to-month, it is important to remember the huge price growth seen between 1999 and 2007 and the subsequent huge falls from 2012 to 2015.
These towns could just be readjusting back to the natural market price that was inflated during the ‘golden years’. Equally possible, and probably true of all five, is that they haven’t recovered due to poor regional management and an inability to make the towns more attractive to prospective buyers.
title image: Perpignan © Wikicommons