New-Build Properties Sell More but at Lower Prices, in Paris and Beyond
For two years now, sales of new-build properties have been going up, up and away in France. Prices, however, are not necessarily following suit.
The third quarter of 2016 saw a 25.1% increase in new-build transactions when compared to the same period last year. According to FPI – the Federation of Property Professionals – the first half of Q3 saw growth of 22.7%. The end of summer is traditionally a very strong period for the market.
In the third quarter of 2016, compared with that of 2015:
- Single property sales have increased 27.6%
- Block or multi-property sales are up 13.8%
- Specialist service residences (nursing homes etc) are up 25%
According to the FPI, the growth has been helped by increases in both professional investment (+28%) and owner-occupant purchases (+27%). “Buy-to-let investment and an increase in purchasing power are simultaneously helping the market grow: an equilibrium has been reached”, said FPI president Alexandra Francois-Cuxac.
However, from Ajaccio to Paris prices have fallen for these new-build properties, particularly smaller properties like studios. In the six months from May to November, Ajaccio saw its new-build studio prices fall 23.5%, with Le Havre closely behind at a decrease of 19%. The FPI table gives detailed information on where the falls have been most marked.
Even the capital saw some negative price movements in this period, despite rising prices overall. The suburbs of Noisy-Le-Sec, Villiers-Sur-Marne and Colombes all saw significant falls in new-build studio prices, between 7% and 10% less expensive. Paris-adjacent Noisy-le-Sec and Villers-Sur-Marne, along with Versailles and Puteaux, saw one-bedroom prices fall as well. Versailles performed the worst, with prices falling 24.5% from May to November.
Buyers have been taking advantage of record-low mortgage rates in both existing and new-build properties, before their imminent rise in early 2017. Falling prices in new-builds have combined with this climate to mean increased purchasing power throughout France, maintaining a healthy volume of sales in these properties.
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