French property sales have risen 7.7 per cent in the last year, topping the record set in 2006.
After a very bullish year in 2016, and as announced by the Notaires de France, sales of older properties continued to rise in February 2017, totalling 867,000 – up from 805,000 12 months earlier and topping the peak figure of 837,000 in May 2006.
This rise, however, should be put into perspective with the rise in the number of dwellings in France. Although total sales rose by 19 per cent between 2000 and 2016 (34,537,000 in 2016 against 28,988,000 in 2000), sales of older properties over the same period rose by only 7 per cent (793,000 in 2000 and 848,000 in 2016), well below the 940,000 transactions that would be needed to achieve a “record” turnover rate.
However, the steady rise in sales since February 2015 shows that the market, buoyed up by buyers (who, it would appear, have not adopted a pre-election wait-and-see attitude), has achieved what the Notaires describe as “cruising speed”.
Indeed, mortgage rates continue to be at historic lows, and even though they are starting to rise, buyers are taking advantage of the favourable conditions while they can.
The tax relief offered by the recent Pinel scheme undoubtedly stimulated investments in new builds, and this tax concession has been extended until December 2017, which is expected to continue sustaining market activity.
The number of home loans rose sharply in 2016. Interest rates remained low for many months running, thereby fuelling the rise in sales and the turnover rate on the property market; with vendors reinvesting the proceeds of their sales simultaneously or virtually simultaneously in a new property.
Agents are certainly optimistic about the year ahead, with a big rise in the number of Brits buying second homes – research shows that the driving forces are climate and value for money.
UK buyers are forecast to make up around a third of all international buyers again this year, with strong demand continuing from American buyers and other nationalities.
