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Where are house prices falling and rising in France this autumn?

The Local France
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Where are house prices falling and rising in France this autumn?
A man surveys estate agent listings in France. A new study has shone light on the country's latest real estate trends. (Photo by PHILIPPE HUGUEN / AFP)

New data has revealed where house prices are rising and falling in France.

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A new study by BFM Business and the real-estate listings website, Bien'Ici, has revealed the latest trends in the French property market.

As well as showing where house prices are rising and falling, it pointed towards a difficult landscape for renters across many parts of France. 

Where are house prices falling?

According to the study, which appears to be wide-ranging but non-exhaustive, house prices are falling fastest in medium-sized towns and cities. 

The biggest price drops from September 2022 to September 2023 occurred in Amiens (-15 percent), Limoges (-10 percent) and Besançon (-9 percent). These figures are based on the per squared metre price of property listed for sale in these cities. 

Average house prices as a whole (not based on squared metres, but based on the overall valuation of properties listed for sale) also fell dramatically in Mulhouse (-21 percent) and Brest (-12 percent). 

Cities that have long been among the most expensive for buying property in France have also seen a marked decline in house prices, including in Paris (-4.7 percent), Lyon (-6.5 percent) and Bordeaux (-7.9 percent). 

READ ALSO: Why France is facing a 'property crisis'

These dramatic declines in house prices follow a period of housing market inflation that followed the Covid pandemic. 

There is an over-supply of housing for sale in some areas, which has contributed to falling prices. The Bien'Ici listings website has never had so many properties for sale - 650,000 in September, or 68 percent more than in January 2022. 

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Where are house prices rising? 

Over the same time period, prices have risen in many parts of southern France, including in Nice (+4.8 percent), Marseille (+1.9 percent) and Aix-en-Provence (+1.9 percent). 

The northern city of Rouen also registered a price increase of +3.3 percent over the course of a year. 

Experts say that cities like Marseille have long been undervalued and that rising prices in the city simply reflect the market balancing itself out. 

READ MORE: What you need to think about before buying that dream house in France

Where is the most expensive and cheapest property?

Unsurprisingly, the study indicates that the most expensive property for sale in France is in Paris, where the average rate is €11,079 per squared metre. 

The highest average prices outside the French capital are in Nice (€6,546 per squared metre), Aix-en-Provence (€6,139), Lyon (€5,219) and Bordeaux (€4,853). 

Across all the towns surveyed in the study, Saint-Etienne had the cheapest property for sale, at an average of just €1,578 per squared metre. 

After Saint-Etienne, the cheapest places to buy property were Mulhouse (€1,957 per squared metre), Le Havre (€2,637), Rouen (€2,905) and Dijon (€2,953). 

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What about mortgage rates?

If you are a cash buyer, falling house prices means that now is a good time to buy in many parts of France.

But if you will need to get a mortgage, the situation is a little tricker because interest rates have continued to rise - by a factor of four in the space of barely 20-months. In September, maximum interest rates for a 20-year loan were capped at a staggering 5.56 percent, while many banks were lending at around 4 percent. 

READ MORE: How to get a mortgage in France

"When the rates are at 4 percent, shouldn't we reflect on [putting in place] a more accessible rate for households?", said Economy Minister, Bruno Le Maire, in a recent interview with Le Parisien

The government is looking into putting in place a scheme, known as the prêt à taux bonifié (PTB), where qualifying people would be able to access mortgages at half the market rate. But French media report that it is unlikely to come into force before 2025. 

Rental market trends 

Rental prices across the 10 largest cities in France have gone up by an average of 3.2 percent in the year to September, according to a separate study released by SeLoger, widely reported in the French media. 

"There are red signals everywhere in the rental market," reads the report. 

Nice (+6.1 percent), Marseille (+4.9 percent) and Strasbourg (+4.6 percent) saw notable rent increases over the course of the year. 

This phenomenon largely stems from an undersupplied rental market, with many property owners now looking to sell rather than rent their asset out. In 2019, 35 percent of the properties listed on Bien'Ici were for rent. Today, that figure stands at just 16 percent. 

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The SeLoger study showed that in the year running to September, the number of rental properties available in Rennes shrank by 42.9 percent; in Paris by 38.3 percent; and in Marseilles and Bordeaux by 15.8 percent. The figure is even more dramatic if you measure the reduced rental supply in Paris since July 2021 - it has fallen by 68.2 percent. 

"Nothing suggests an improvement to the stock shortage and rising rents in the coming months," said Barbara Castillo Rico, a SeLoger researcher cited by L'Express

She also offered a further explanation: "Households are abandoning plans to buy property because of tougher financing conditions and so are not moving out of rental properties, which leads to increased tension in the rental market."

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steven 2023/10/03 15:11
shrink, shrank, shrunk Please

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