Analysis of the French property market in 2016

Just how great is the French property market and what are the buying trends?

Last year was a very dynamic year for France, attracting worldwide investors to their property market. Sales over the year rose steadily and reached its peak during summer 2016. It was concluded that 843,000 transactions were made, up 9% year on year. It is worth noting that the price of second-hand properties in France increased over the year of 2016, as did apartments and house prices in general, showing a higher demand across the country in real estate.

It seems that international buyers are searching for the hottest properties on the market while taking location popularity into consideration. This factor is a big decision-maker for many people – many believe that it is good to follow a trend and to keep up with desirable locations to live – with the French property market being a top favourite.

The French market conditions were driven by price stability in the main towns, appealing interest rates and interest-free loans. Not only that by the success of the Pinel scheme for investors in new homes seemed to increase sales – for sure, France has been working hard on incentivising investors to buy in their country.

Between 2008 and 2016, property-buying power increased by 29%. Monthly payments declined, which meant huge savings for buyers. The low and affordable rates allowed many people to increase their budget, leading to a great return of first-time buyers. Sales volumes increased too (+29% between Feb 2013 and Oct 2016. Although that was the case, over the years now prices have increased and may continue to this year, it remains a top location to invest in property no matter the reason.

It should be noted that there is a de-correlation in the price rises, depending on the type of property. Apartment prices increased slower than houses in the French provinces, and the reverse situation in Greater Paris.

Written by Gemma Smith

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