Prices dropped in all major French cities in October
Meilleursagents’ monthly barometer finds that real estate prices in France have decreased slightly in Paris as well as in nine other large cities during the month of October.
A slight property price decrease was recorded in October across ten major French cities last month, according to Meilleursagents’ latest monthly property price report. The drop in Paris was minimal, and followed an uptick in September.
Price drop per square meter ranged from 0.1% in Paris — as well as in Marseille, Lyon, Nantes, Strasbourg and Montpellier — to 0.9% in Toulouse. Decreases in Bordeaux, Nice and Lille respectively equaled 0.3%, 0.4% and 0.6%.
In September, property prices were already seen falling by between 0.2% and 0.7% with the exception of Paris, where prices had risen by 0.5%.
The barometer also reveals price fluctuations over one year and from the beginning of the year. Since January 2015, prices in Paris have decreased by 1%, also decreasing by between 0.5 and 2.4% in six of the other nine cities examined, while they rose by 0.3% in Bordeaux and by 2.3% in Nantes.
Results are largely similar over a year. Paris, Marseille, Lyon, Montpellier and Lille experienced price decreases by between 0.8 and 2.4%, Nice and Strasbourg suffered sharper drops — of 3.3% and 3.6% respectively — while no change in prices was recorded in Toulouse and Bordeaux. Only Nantes saw its real estate prices swell by 1.9% between October 2014 and October 2015.
The notaires in Paris and Île-de-France had already alluded to Parisian property prices stabilizing or decreasing slightly in coming months. Their study helped remind buyers that the real estate market recovery currently experienced in the capital and in other major French cities concerns sales volumes rather than prices.
Meilleursagents’ price barometer also features a Real Estate Tension Indicator, revealing how many buyers are actively searching for property against how many properties are on the market. In cities where there are more real estate goods on offer than people willing to buy them, the indicator is below one: as in Marseille, Nice and Lille this month, where the numbers are 0.7, 0.9 and 0.9 respectively. In cities where sellers and buyers roughly even out, the indicator equals one or slightly exceeds it. This is the case in Toulouse (1.0), Montpellier (1.1), Strasbourg (1.2) and Bordeaux (1.3). In Paris, and Lyon there are 1.4 buyers for every property on offer. Only Nantes’ indicator comes close to having two buyers per home with an indicator of 1.7.
Sébastien de Lafond, CEO of Meilleursagents, notes that the indicator “increased from 1.3 to 1.4 in Paris in October,” proving that demand is gradually growing. Yet the recovery in demand is insufficient to lead to a surge in prices: “Prices continue to fall almost everywhere because the number of buyers, despite being on the rise, remains too low compared to the number of properties on the market.”
This is good news for most buyers, as falling prices and low interest rates have contributed to a notable increase in purchasing power.
Sébastien de Lafond is optmistic about coming months and for the year 2016. Despite being slight, “the new increase in demand is a positive indicator signifying a return to a profitable real estate market within 12 months,” says de Lafond. He adds that “a fall in unemployment rates expected for 2016 will stimulate demand for property.” Finally, the planned expansion of zero interest rate loans — to take effect in January 2016 — is another factor which will facilitate property purchases, according to Meilleursagents.
Photo by Anissa Putois