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Could the French property market slow this year? Some agencies think so
Market figures released by Guy Hoquet for the third quarter show a slow in the property market nationwide. What are their predictions for the fourth quarter?
Summer is traditionally a more quiet period for the French property market, though low rates and government help-to-buy schemes has ensured a bucking of that particular trend this year. Figures from Guy Hoquet Immobilier, an agency with 480 branches nationwide, show that the third quarter of 2017 saw 5.1% more transactions year-on-year.
That doesn’t mean yearly price growth figures – the important measure – are still not strong: as of September 30, prices have grown 2.4% nationwide and 5.1% in the capital according to their latest release. Others have it as high as 8% in Paris. Along with cities like Bordeaux and Lyon, it is carrying the average.
The countryside is not sharing in this appreciation, with only 0.2% growth in the last year. In fact, the last three months have seen the nationwide – city and countryside – average asking price fall 0.5%, though this is not abnormal for the quietest part of the year.
Purchasing power seems to have already peaked this year according to the report, with a noted decrease in the size of properties bought. In the third quarter, the average size of bought properties fell 1m nationwide and 2m in Paris. “Price growth in the last 12 months has forced buyers to be more flexible on their desired size of property. The limit of purchasing power of French citizens seems to have been reached,” said Fabrice Abraham of Guy Hoquet.
They note a price per m2 by Q3’s end of 9,349 euros in Paris for existing and new-builds.
Investors are 18% of buyers versus 10% three years ago, but Guy Hoquet say they are more hesitant than in previous months. People are waiting for the reforms to housing regulations promised by the government, they say. Reductions in housing benefit, reforms to property taxes and easing construction regulation are being watched closely.
What for the fourth quarter? While price growth should pick up nationwide over the next few months, Guy Hoquet think falls could be seen in the countryside. And Paris’ might slow, too. “Even in Paris, growth in the next few months is unlikely to equal the year so far,” said Abraham.
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