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According to the final “notaire-INSEE” index* the French property price remained stable during the 3rd Quarter 2013, while the market slowly decreased over a year by 1.3% (-1.5% for Paris region and -1% for France outside of Paris region/Ile de France).
Downward trend was confirmed year on year for flats in Alpes Maritimes (-3.7%), Charente-Maritime (-4.9%), and for houses in Corrèze (-6,7%), Doubs (-6,8%) and Manche (-3,7%), while houses price increased in Hérault (+2,5%), Vienne (+4,8%) and flats in Alpes-de-Haute-Provence (+5,3%), and Loiret (+5,2%).Half of the French “departments”** experienced a market price decrease between the 3rd quarter 2012 and the 3rd quarter 2013, while price increase in one third. For many “departments” the long-term trend is not clear has price trend reversed from one year to another.
In cities with more than 200 flats sales over a year, flats price increased in Montpellier, Rennes, Dijon and Strasbourg by approximately 2%. Prices remained stable at Bordeaux, Lyon and Lille. In Reims, Toulon, Marseille, Nantes, Grenoble, Nice et Toulouse, property price decreased by 1 to 5%, while Saint- Etienne was down 10,9%.

Number of property sales over a year underline a weak property market:  At the end of September 2013, the number of property transactions reached 689 000 / year, a 6% and 16% compared respectively 2012 and 2011. The number of property transactions were below 700 000 only twice since 1999, in 2008 and 2009. However the transactions number increased by 5% since January.

What could impact the market in 2014 ?
According to the French notaires, the property market has been partly impacted by more stringent mortgage conditions in France as bank do not agree for 100% mortgage with no deposit and generally deposit threshold has become higher. There has been a renewal in the mortgage market in the 4th quarter 2013, mainly driven by mortgage re negociation. The 0.7% additional stamp duty from March 2014 onward should not have significant impact, adding Euros 1.400 for a Euros 200.000 property. The capital gains tax reform, in place since the 1st of September 2013, which includes a 25% additional rebate*** until the 31st of August 2014, should have a positive impact.

*Notaire-INSEE index: all property transactions in France are signed at a notaire office, therefore the French notaires have access to the most precise and extensive data base on the French property market. INSEE is the official French statistical body. However, the notaires usually disclosed data based on final sale contract “acte authentique de vente” which is generally signed-off 3 months after the legally binding preliminary contract or “compromise de vente”. Therefore, the notaire-INSEE index for the 3rd quarter 2013, reflects the transaction prices of the 2nd quarter 2013.

**Départements : France is divided in approximately 100 “départements”

***For more information on the capital gains tax reform, read the previous posts. The reform has been fully approved by the French Parliament in December 2013

“2013 2014 capital gains tax calculator for French second home”

“Capital gains tax on French property: latest updates and calculations (part 1)