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Paris realtors optimistic once again
With buyers returning to the market — thanks, in part, to interest rates on property loans reaching record lows — real estate professionals report being more optimistic about the future of the property sector.
A report published on 21st September quantifies this renewed optimism. The survey, commissioned by the Crédit Foncier and the CSA, reveals that 63% of real estate professionals in France are finally optimistic about the future of the French property market.
Results were collected from respondents — including realtors, developers, promoters, builders and asset managers — in late August and early September. The study of real estate professionals is the third this year, part of a report published every 4 months. It aims to quantify the ‘morale’ of real estate professionals across the country by polling a representative sample of 400 professionals.
The latest results indicate that these professionals’ morale has largely improved since the beginning of the year — only 35% considered themselves optimistic in January and 59% in May. In the Île-de-France region alone, 60% of professionals considered themselves to be optimistic in September — with 6% being extremely optimistic about the year to come.
The top three reasons stated for this newfound optimism were low levels of interest rates, the slight rise of property prices and new frameworks and laws helping prospective buyers finalize their projects.
Indeed interest rates hit a historical low this year — all loan amounts and durations combined — falling below the 2% mark in June, their lowest level ever.
Realtors were also asked to report on their customers’ attitudes towards the market and their own purchasing plans. In Paris and its region, the study reveals that while 39% of clients were optimistic and 23% were pessimistic regarding the realization of their buying projects, 37% exhibited a ‘wait and see’ attitude.
While the market has not rebounded exceptionally, it is nonetheless stabilizing and slowly recovering its pre-crisis quality.
CEO of Sotheby’s International Realty France-Monaco, Alexander Kraft, says: ‘After three difficult years, the French real estate market is recovering its normal activity levels, Paris included. With a great selection of interesting goods, buyers are finally returning to the market to look for bargains’.
The Paris notaires estimate that average prices are expected to surpass the 8000 euros per square meter mark by the end of October. The luxury property market is also welcoming the return of transactions worth several million euros. Professionals note increased sales of family apartments as well as the return of foreign buyers.
Kraft mentions ‘buyers from the United States, the Middle East and Asia being especially attracted by the weaker euro and lower property prices’. This combination of factors allows them to save up to 45% on purchases this year, compared to the prices in dollars of 2013 and 2014, according to him.
Advantageous property prices as well as low interest rates have led to French buyers returning to the market as well. Indeed, compared with the uncertainty of the stock markets, investing in real estate remains a safe bet. Home ownership is in fact gradually rising in France: according to the latest INSEE figures 58% of households own their homes, up from 51.9% in 1984.
Young adults seem to share this confidence in real estate. According to a CSA poll commissioned by real estate agency Guy Hoquet, 90% of 18-29 year olds say they plan to become homeowners in the near future.
Photo credit: Wikimedia Commons / Rosss