A poor economic climate and inflexible sellers are to blame for a dramatic dip in property sales across France in 2012, according to experts. A difference in asking price and sales price greater than 5% and properties lingering on the market for an average of nearly 90 days signaled to analysts that prices were too high in 2012, contributing to a 25% in sales. Areas popular with British buyers like Normandy and Brittany were hardest hit while properties in the French Alps bucked the trend with increased sales for the year. For more on this continue reading the following article from Property Wire.
Property sales in France fell by 25% in 2012 and prices fell in most regions, most notably lower Normandy and Brittany, popular areas with British buyers.
According to the latest data from the FNAIM, the organisation representing estate agents, prices actually increased overall by 0.8% but this figure masks considerable regional variations.
Prices increased the most in Ile de France where they climbed 1.5% and also increased in Provence and the Cote d’Azur and Champagne Ardennes by 0.7%. Upper Normandy saw a 0.6% increase, Languedoc Roussillon was up 0.5%, Rhône Alpes by 0.3% and France Comte by 0.1%.
Prices fell the most in lower Normandy, down 5.7%, and were down 5.3% in Brittany. Prices fell 4.4% in Poitou Charentes, 3.3% in Pays de la Loire, 2.7% in the Midi Pyrenees, 2.5% in Centre and in Lorraine, 2.2% in Limousin, 1.5% in Alsace, 1.1% in Bourgogne, 0.5% in Auvergne and 0.2% in Aquitaine.
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Once reason for such a large fall in sales is due to the economic climate and also the fact that sellers are not prepared to bring down their prices to a level that buyers are prepared to pay, according to Michel Mouillard, economics professor at the University of Paris-X at Nanterre who specialises in the housing sector.
Figures also show that the difference between asking price and sale price was 5.46% in 2012, up from 5.08% in 2011. The number of days a property is on the marker until an offer is made was 87, down slightly from the highs of 2009, but still well above the 64 days of 2004.
Standard & Poor’s has forecast that prices will fall by 5% in France in 2013 while figures from different real estate organisations vary. The FNAIM is predicting a fall of up to 2%, Century 21 says 1% to 2% and Orpi 3%.
Mouillard reckons that a lot will depend in jobs. ‘We are in deteriorating economic climate. Only the very low bank interest rates have prevented the market from collapsing,’ said Mouillard.
He added that someone buying a house in 2012 would need a mortgage of 32 year compared with 15 years for the same property in 2000.
One area where the market is bucking the trend is in the Alps. According to the Chamber of Notaries of Savoie and Haute Savoie the French Alps property market is holding up relatively well but there is variations between resorts and chalets are generally selling better than apartments.
For example, in Morzine the average price per square metre increased by 12.8% year on year, reaching €4,711 and in Meribel it increased by 15.1% over the same period to €7.239 per square metre.
In Courchevel 1850, the average price of apartments fell by 4.9% this year to €11,170 per square metre and apartment prices nfell by 8.7% in Le Chablais but chalets have increased by 5.7% on the same period, to reach an average of €300,000.
This article was republished with permission from Property Wire.