The year 2010 saw a real estate boom but the beginning of 2011 shows that the market again towards a downtrend. Update on the situation.
The balance of the year 2010 was marked by a strong rebound in property prices. A rebound confirmed by data from notaries in France. Thus on average, house prices have risen more than 8% in France.
These data continue to be analyzed and gives new information especially on the situation in the third quarter of 2010.
Location of apartment prices
For this period and year over year, home prices marked a rise of 8.5% yoy in the third quarter. But be careful, the situation is heterogeneous between a province sees increase its rates by 5.2% and peers more than 12.2%.
Location of house prices
As so often, the house price reacts differently collective dwellings. This is the case once more. Houses rose by 8.7% on average nationally, but with a nice 9.1% in the provinces against only 7.6% in Ile de France.
These data are interesting and clearly shows the interest of looking at the data in detail. In the case of a national average slightly lower parts of the country have been in sharp decline and others increasing.
The year 2011 marks the beginning of change
While statistically the price of housing in France is generally increasing (mainly due to the Paris region), some regions have already begun a process of decline. This is the case of Upper Normandy who comes in the last three months show a decline of more than 2%.
In addition, the real estate trend could change more broadly at the national level, leaving only the Paris region to rise. The first factors are expected to decline already at the rendezvous. For example, the return of higher mortgages. Loan brokers are finding that credit rates have already risen by more than 0.45% over the last two months. Some even predict an increase in appropriations of 0.5% in the next six months. The situation tends to the housing market nationally.
Factors of decline in the property market
Add to that a very unfavorable economic conditions with unemployment on the one hand that reaches just to stabilize at 9.7% in the third quarter of 2010. And above all, inflation is rising to iron some of which believes it will reach 1.5% in 2011. An optimistic forecast given the surge in raw materials such as grain or oil.
This inflation will also serve to strengthen the higher credit rates . Indeed, the governor of the European Central Bank (ECB), Jean-Claude Trichet, monitors inflation and could quickly increase the rate of the ECB to limit it. Must remember, this rate determines the cost of borrowing money from banks to the same central bank. The commercial banks will pass on the increase so future borrowers.
Finally, another negative factor is the reduction of the tax exemption Scellier which should slow down a bit more buyers.
Finally, 2011 should advertise the market hard and the balance of the year will be in the best conditions, probably a slight decline in prices and volumes. In a more pessimistic, some already announcing an upcoming real estate crash .