Home Costs in France Stable in Third Quarter

Over the past twelve months, French Home Costs have for that reason fallen by 9.1%. apartment costs in the quarter fell 0.7%, giving a fall of 7.4% over a year. In the month of September alone Costs in fact went up by 0.1%, leading the agents to conclude that there had been signs of growing stability in Home Costs. They argue that the small rise in Costs may perhaps in part be explained by the shortage of properties on the market, as numerous prospective sellers have decided to hold off putting their property up for sale until the market picks up. As usual there are large variations across France.

There continues to be controversy over the FNAIM figures, with some commentators arguing that FNAIM have been playing down the extent of the fall in Home Costs. The association defend their analysis by reminding us they did argue earlier this year that Costs remained too high, and that there was the require for a ‘purge’ in the price of property, in order that the market may regain its colours. Every month FNAIM analyse around 5000 sales, representing 12% of the total market.

There is some backing for the FNAIM perspective from the syndicat national des Professionnels Immobiliers (SNPI), a rival association of French agents, who do contemplate that buyer interest in the French housing market has risen since the summer, even though they anticipate no main recovery until the second half of 2010.

The national estate agents group Century 21 also report an improve of 14% in the number of sales in the third quarter over the exact same period in 2008. Even though Home Costs remain down on those recorded in the exact same period in 2008, on average Century 21 report that Costs in the quarter remained stable. As usual, on the other hand, there had been considerable regional variations. Home Costs falls had been recorded in Languedoc Roussillon, Limousin, Aquitaine, and Brittany, whilst there had been notable increases in the quarter in Provence Cotes d’Azur and Poitou Charentes, both regions that have recorded a considerable reduction in Costs in previous months.

Orpi, yet another big group of estate agents, also recently reported renewed interest in the market, mainly due they say to average price falls of around 20% over the past two years. Similarly, the Guy Hoquet national chain of agents has also reported an improve in sales of 12% in September over the exact same period last year, even though in most areas Costs had been still on a little downward trend. The FNAIM third quarter figures are also broadly in line with the trend reported recently by the Chambres des Notaires, who take into consideration that property Costs fell by 2.three% in the second quarter, following a fall of three.8% in the initial quarter.

Given the present weakness of the French economy FNAIM remain prudent on the outlook. An opinion poll they carried out as part of their quarterly review showed that only 12% of households had an intention to buy within the next 3 years, even though 39% considered now was a excellent time to buy a property.

Respondents cited continuing difficulties in obtaining a mortgage due to the level of the deposit needed, and that mortgage interest rates had been still too high, despite having dropped considerably over the past few months. A majority also considered that their income had gone down in the past year and that they remained concerned about the economic outlook.

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