Property prices in France
House prices kept rising in the past 10 years, not affected by the 2008-2009 crisis. Indeed, unlike Spain or Dubai, the price increase doesn’t seem to stop: no crisis, and no decrease. The only way seems to be up, as long as interest rates support this situation.
Paris, Lyon, Toulouse, Marseille, Lille
Property prices in Paris are now well over €10,000/m2, with €14,000/m2 observed in the 6th and 7th arrondissements. Indeed the increase has not stopped since 1998. A strong increase of +51% in 10 years, and +23% in 5 years.
French biggest cities are also all growing, from Lyon to Bordeaux, Toulouse and Lille. Please read this article for information on more cities.
As long as interest rates remain low, the number of transactions will average 1 million per year and prices should not go down.
A future crisis?
Nothing seems to point to a future crisis, however property prices could go down in many cities according to MeilleursAgents.com (study). Indeed, in 2018 already, average prices fell in 35% of the 50 largest cities in France. Nothing to be alarmed about, yet the progression in property prices should slow down a little.
One big factor to follow, which impacts property prices directly: interest rates. However, as France’s mortgage market is mostly fixed rates, there is nothing to worry about. An interest rate increase wouldn’t create a crisis.
Poor rental yields
Property investors who bet on the French property market 20 years ago can be happy. Yet, the increase in property prices was not followed by an similar increase in rents (GlobalPropertyGuide). The consequence is obvious: rental yields are not high in France. Indeed 5% is estimated to be a good rental yield in most French cities (see rental yield per city).
Therefore France does not top the European ranking of countries where property investments are most bankable. Yet as long as property prices increase, many investors will be happy with the French property market’s stability, and moderate profitability.
