Property prices stabilizing in Normandy

After several months of decline, prices are becoming stable in some sectors of real estate in Normandy. Professionals note the combined effect of favorable borrowing conditions for buyers and sellers becoming more reasonable in setting their prices.

The Norman property market is back in business, with prices stabilizing slowly but steadily. In recent years, the market had been stirred by significant variations in sales volumes.

Eric Rungeard, notaire in Déville-lès-Rouen — a small commune northwest of Rouen — deems the current market to be in ‘a phase of growth, certainly slower than previous months, but also more serene’.

Certain sectors of property in the northwestern French region have even seen prices rise ever so slightly, mainly in city centers. In the last three months Rouen and Le Havre have seen the average price of apartments increase by 6.5% and 7% respectively, according to the Regional Council of Notaires of Haute-Normandie. Prices in other geographic areas, such as the periphery of Rouen, experience no growth or continue to drop.

Recovery also depends on the type of property, with low-priced houses in need of renovation becoming quite popular, while sales of homes advertised for between 165,000 and 205,000 euros and higher continuing to fall sharply, as they have done for the last five years.

Despite this uneven recovery, the rise in sales volumes across the region has given renewed confidence to buyers, according to Rouen notaire Grégoire Ozanne. He adds however that ‘there are no definite indicators showing that this will last, as it all depends on how fast interest rates are reassessed’. They are currently at an all-time low of 2% over 15 years.

Prices for property in Normandy rose dramatically between 2004 and 2008 — across all types of property — but the economic crisis halted this surge and brought about a long period of decline.

The beginning of the summer saw the Norman real estate market continue to struggle, with prices dropping not only in the suburbs and countryside, but also in the historic center of Caen (where prices fell under the 2,500€/sqm) and Rouen (whose property prices dropped to 2,100€/sqm).

Demand for property in Le Havre remained sustained nevertheless and luxury housing overlooking the harbor continued to sell for more than 3,000 euros per square meter.

At this time the market’s slump had also hit second homes along the Normandy coast, sales of which had fallen by half in some places.

Despite prices beginning to stabilize, enduring lows have meant that buying has become cheaper than renting in Normandy. According to a recent study by Meilleurstaux, property bought in Le Havre could become profitable within a year. Rouen, on the other hand, is a little less attractive to investors with the holding period for a purchase to become worthwhile being four years. This remains far shorter than the average period in Paris, of 14.5 years.

According to Pratique.fr, Rouen and Le Havre remain the two best cities for investment in the region. It reveals that the modest sum of 100,000 euros buys a 50m2 apartment in Rouen and Le Havre, or a 400m2 land parcel in Le Havre.

An incentive presented to the city of Rouen in 2012 encouraging residents to break up their property to sell part of it— met with little enthusiasm at the time — has begun to attract more cities and individuals. Dubbed ‘Bimby’ — short for ‘Build in my backyard’ — the project urges home owners to divide their plots, putting part of their property for sale where the construction of a new home is possible.

Initiated to combat urban sprawl and allow cities to increase their population in areas already well served by transport links and businesses, Bimby also allows owners to capitalize on their property. The Rouen metropolis, the town of Dieppe and the Architecture, Urban Planning and Environmental Council (CAUE) of the Eure department have all integrated Bimby into their urban planning projects.

Photo: Honfleur harbor in Normandy, credit: Wikimedia Commons / Ignaz Wiradi