French property prices remain stable but are forecast to rise in 2015 and 2016
The Notaires de France (officials who handle property transactions) indicate that French property prices were stable at the end of May.
In advance of their quarterly analysis for the 2nd quarter of 2014, the notaires’ bulletin shows that prices in Paris saw a slight decline of 0.2% between February and May. As ever, these figures conceal wide variation among and within arrondissements (districts).
Sales volumes in the Ile-de-France region (which includes Paris) from January to May 2014 showed an increase of 5% over the same period in 2013.
Meanwhile, credit ratings agency Standard & Poor’s predicts an overall increase in French property prices in 2015 (+1%) and 2016 (+2%), following a dip in 2014. This increase will be particularly apparent in the big cities, above all in Paris, where demand for properties outstrips supply.
Standard & Poor’s also attributes the expected increase in prices to continuing historically low rates of interest, resulting from central banks’ current monetary policies. Real estate price development is closely linked to interest rates.
Finally, despite slow economic growth in France, property owning aspirations continue to sustain the real estate market.