The French housing market is suffering and marked by uncertainty

Worsening economic circumstances, runaway taxation, high prices, a much contested proposal to reform the rental sector…... 2013 was a difficult year for property, fortunately supported by historically low rates of interest. 2014 begins under the same auspices with, in addition, fear of the next rise in mortgage interest rates. These are the main themes of the analysis presented to us by Jean-François Buet, President of the FNAIM.

The residential resale market has worsened distinctly since 2013. The number of transactions in 2013 fell to the level of 2008, the year when the subprime crisis exploded.
This fall in activity is explained by a weakness of supply. Potential vendors abandon their plans because of a lack of confidence in the future and a fear of taxation on the profit. The low level of production of new dwellings also accentuates the lack of offer.
The fall in activity is also due to a diminution in demand. Many potential buyers, in particular first-time buyers, no longer have the means to acquire a home or hesitate to take on debt for fear of their professional situation.
The number of transactions has fallen by 5.1%. Paradoxically, the fall in the number of transactions does not translate into a large fall in prices (-2.9%). Up until now, it seems, the parallel reduction in supply and demand has prevented the build up of a large amount of stock for sale and has limited the fall in prices. However this is nuanced according to the geographical situation: it is more apparent in the areas of employment most affected by the economic crisis.
Directly correlated to the living standards of the French who rent their dwelling, rents in the private sector have settled down: they fell by 1.3% at national level.
Click here to read the report (in French).
Click here to consult the graphs (in French).