Number of Annual Property Sales in France Breaches 900k: new Record set
The number of property sales in France reached 907,000 in the year to May, higher than any previous 12-month period on record.
A new record for property sales in a 12-month period was set in May as buyers rushed to take advantage of low interest rates and secure purchases before the presidential election result. Fast-rising prices did not deter buyers despite widespread falls in purchasing power, as rates crept up and prices soared.
The Notaires of France, who compile the country’s official property market statistics, released the findings, saying that “the buyers now have the upper hand in the market”. By that, they mean the rising prices and low rates makes it a time to buy, not sell, putting the ball firmly in their court.
FNAIM’s president Jean-Francois Buet believes there is yet more price growth to follow, adding that “a jump in transactions often precedes a jump in prices; as sales occur with little or no negotiation, prices inevitably go upwards.” But it is not a one-way street. The Credit Agricole’s economist Olivier Eluere highlights good reasons why both buyers and sellers wish to wrap up deals right now.
“The market has a solid foundation, house prices in 2017 and 2018 are in a classic ‘boom’ period, with an upward trend supported by hopes of capital gains and the willingness to pay the current market price in the belief it will continue to rise.”
Previous records for annual property sales in France had been set in 2006 and 2012, but the Notaires are hesitant to claim the superiority of the current market. They highlight the – some might say artifically – low rates as the main spur behind activity, and a large number of property transactions that have been long-term negotiations from the last few years only recently wrapped up.
They argue that for the market to be labelled as dynamic as the golden years of 1999-2007, we will need to see a figure of 930,000 property sales in a year. Other market commentators are keen to remind onlookers of the strong impact of Pinel – which is only guaranteed to the end of this year – as a spur to activity in the market. The FPI claim that half of all property sales are through the device that allows buy-to-let investors a tax rebate on their rental income.
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