Property price report

An April 2009 report issued by FNAIM (Federation Nationale de l'Immobilier), the largest estate agency association in France, comments on the French property market and the impact of global economic conditions on prices.

France

Property prices across France fell during the first quarter of 2009; however the professional opinion is that this adjustment reflects a correction rather than a collapse in French property values. Unlike other markets such as the UK and the US, the French have been more circumspect in their property investments and much of the reason behind the fall in property values is a sluggish market due to a lack of consumer confidence in long-term investments. FNAIM also comments that market conditions for buyers have not been this advantageous since 2003; attributable to a number of factors such as low interest rates, low inflation and negotiable property prices.

Overall property prices across France have decreased by -5.7% over the past 12 months and there is a -9.8% decline between the first quarter of 2008 and the first quarter of 2009. Regional fluctuations show some differences, with declines of -7.7% and -6.1% on the east and west side of the country, -6.4% in the south-west, -8.8% in the centre and Alps, -11.2% in Paris and -13.3% in the south-east of the country.

A survey conducted amongst 260 FNAIM agencies across France recorded a -25% decrease in the number of transactions taking place, however 61% of the agencies recorded an increase in the number of interested buyers year-on-year. Just over half their vendors were prepared to negotiate on the asking price of the property, by an average of -14%. Interestingly 23% of candidates are looking for a second home, showing that France has maintained her popularity amongst holiday makers and property investors.

Haute-Savoie

In the Haute-Savoie region we have seen property prices negotiated by an average of 5-10% during the first quarter of 2009, with some resort centre properties still selling for the full asking price and vendors in the outer-lying areas accepting lower offers. Advertised sale prices have not yet reduced by any great margin. As less new build developments (-17.5%) are launched across the country and the ski resorts of the Alps, rental values have started to increase and in the central and alpine regions rental values are up 3.9% for apartments and 3.7% for houses. The squeeze on supply has increased demand for rental properties and this is welcome news for property investors.

The alpine property market is starting to show signs of levelling out, with a greater number of buyers registering interest in property in the region. Whilst some buyers are adopting a "wait and see" approach, others are successfully negotiating prices and mortgage deals that enable them to invest in a property that would have been unaffordable two years ago. With an excellent ski season behind us where occupancy rates reached 100% in the peak weeks and an average of 70-90% across the rest of the season, it's a fantastic time to take the plunge before the green shoots escalate.

To find out more about property for sale in the French Alps, please contact us.