A general overview of the French real estate market as of April 2009. More about the market in the French Alps later.
After 10 years of growth (1997 to 2007) the French real estate market started to slow in 2008. From 1997 to 2007 prices overall more than doubled and some years saw growth rates of 20%+. From early 2008 to early 2009 prices were where down by about 5%-10% overall. Even Paris saw a drop of 5 %. Grenoble in the French Alps saw a drop of more than 10% in property prices.
In terms of total home sales for France, in 2008 sales were down 20% compared to 2007. Even Paris didn’t do well. Total sales were down 47% for January 2009 compared to January 2008. This all adds up to a buyers market. With on average a property now taking 5 months to sell as opposed to 3 months during the growth period.
Many buyers are waiting for prices to come down even more. It’s unclear if that will happen but one estimate I saw said that prices would come down another 10% for 2009. On the other hand some say that prices will stay the same or fall slightly.
I for one am not convinced that will happen.
Why?
Because compared to some countries, US and UK for example France has a relatively low rate of home ownership, so there is still a large amount of people in France that would like to buy. The buyers are there but they are waiting, hoping prices will go down even more. Another factor is that many owners aren’t really hurting even if their house is valued at less than they bought it at. In France it’s impossible to buy a home unless you have a down payment of typically 20% and monthly payments have to stay within reason. I know when we bought our apartment the bank was very strict and we had to prove income and even where our down payment came from. In short a subprime loan in France isn’t possible. Therefore there aren’t many owners who need to sell to get out from their loan or banks with lot of foreclosed property for sale. What you can find are ‘relay’ sales where owners have bought another property on the condition that they sell the home they have.
The statistics mention here come from an article I found in Libération.
