A new record set for the price of property in France

The average price of property in France has set a new record during the fourth quarter of 2010, with an increase of 8.7% on the year, announced Century 21, one of the world’s largest estate agency networks with 117,000 agents in 68 countries.

Compared to the first semester of 2008 where the highest average was 2 549 euro per square metre, we’ve seen an average of 2 580 euro in the fourth quarter of 2010.

“The decline in prices recorded during the financial crisis which lasted from the second semester of 2008 to the first semester of 2009 has now completely faded”, observed Century 21.

However, this new record masks profound disparities between Paris and its suburbs, where prices have climbed a lot in 2010, and the more moderate rest of the country.

The average price rose by an average of 18.46% over 12 months in Paris, and by 7.8% in the capital’s suburbs, according to Century 21’s figures, based on the 49, 700 transactions the network carried out in 2010.

However certain areas saw their prices fall in the second semester of 2010, such as Alsace, Burgundy and Nord-Picardie.

For the year overall, Haute-Normandie is the only region to have seen its prices fall (-1.9%).

Century 21’s figures concerning Paris confirm the predictions of the Chambre des notaires, who had foreseen a 20% rise over the year in December.

Nonetheless, the records do mask a clear deceleration in the second semester of 2010, a period during which prices rose by less than 1% compared to the first six months of the year.

Considering the frailty of households’ solvency and in spite of the new mortgage loan with reinforced 0% interest, Century 21 is staying prudent.

The network estimates that the possibility of arise in house prices in France of between 2 to 3 % should not be discounted, but notes that the evolution of the market will mainly depend on interest rates.

“This rise in prices is very closely linked to and dependent on interest rates as these days, most other levers permitting access to housing have been called upon already,” concludes Century 21.

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