Weather and strikes negatively affected the French real estate market in May
MeilleursAgents latest report notes the negative effect of May’s bad weather conditions and severe strikes on France’s residential real estate sector. A return to normal is expected for following months thanks to interest rates remaining at an all-time low.
The 82nd edition of MeilleursAgents monthly barometer finds that the real estate market in France suffered from particularly adverse weather and the tense social climate last month.
While as many properties were put up for sale as in previous months, buyers were noticeably less present, according to the report. This is because strikes, blockades, fuel shortages and other social movements across France are believed to have hampered buyers’ visits.
Last month was also the rainiest month of May in 130 years in France, with torrential downpours and floods hitting the capital region especially, a factor which contributed to slowing down property sales. MeilleursAgents expect these difficulties to subside and the market to quickly recover its normal activity. This will be aided by interest rates on mortgages, which have hit a historical low and continue to fall.
At the start of the year, average interest rates on loans for 20 years were at 2.5%. They are currently at 1.9%, equating a 4.8% increase in buyers’ purchasing power in just under six months.
The country’s economy is reportedly recovering faster than expected, and job creation has also risen gradually, allowing unemployment rates to fall slowly. However, the fall of the pound following the announcement of Britain’s exit from the European Union may have negative repercussions for the euro, and thus France’s economy, in the short-term at least, according to MeilleursAgents.
In Paris, real estate prices increased in May, by 0.8% — 1% for large properties (3 bedrooms and more) and 0.7% for two-bedroom flats. The situation is similar across Île-de-France, with the exception of Seine-et-Marne, where prices dropped by 0.5%.
Outside of Paris, most major cities also saw their average prices rise in May. They rose by 0.3% in Marseille, Lyon and Lille, by 0.4% in Toulouse, by 0.5% in Montpellier and by 0.8% in Bordeaux. Only Strasbourg (-0.6%) and Nantes (-0.2%) suffered a price drop.
Photo credit: Wikimedia / Antoine Fleury-Gobert