French property prices on the increase

Based on a quarterly report released by the Federation Nationale de l’Immobilier (FNAIM), prices of French property rose to 8.3 per cent between March 2005 and March 2006. But twelve months prior to this, the French property prices increased by 13.6 per cent. Furthermore, despite sales growth of 4 per cent between March 2005 and March 2006, the last three months of this period showed a significant decrease in sales.

One area that showed a marked decline was apartment sales in and around Paris. Although the average apartment price increased by 7.9 per cent to 5,651 euros per square metre, the capital’s rate of price growth still fell behind the rates that other key cities in France are enjoying. In Pau, apartment prices rose to 17.7 pe cent to 1,956 euros per square metre between March 2005 and March 2006.

But generally, the report was on the positive. FNAIM figures showed that French property prices rose by 10 per cent in most of the regions, naming Normandy, Britanny and Aquitaine as top performers. VEF reported that Aquitaine has the most costly average property prices at 234,962 euros while Normandy was the cheapest at 168,056 euros. Gascony area also showed a strong price growth which includes nearly half of the Aquitaine and a third of the Midi-Pyrenees.

However, Robert Monk of Gascony Property said “ The Gascony property market is very localised, so some areas are definitely hotspots while in some overlooked pockets prices are stagnating or even decreasing.” He further said that “ Property prices in areas around budget airline access points, like Pau, and northern Gers, especially around Condom, showed the strongest growth.” But Monk feels that the increases are usually for properties which are 250,000 euros or less. He continued to say that “ There are too many properties on the market for more than 250,000 euros, typically renovated properties, which means that they are overpriced compared to supply.” A decline in the French economy resulting to the need for some French property owners to liquidate some capital has “led to an influx of small properties onto the market typically costing up to 150,000 euros”, Pat Monk added. She advised those who plan to renovate properties that “artisans’ cost have gone up hugely in recent years, so this must be factored into your calculations”.

Posted on: France

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French property prices on the increase

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