Market Trends of France Condominiums and Apartments Industry
This section covers the major market trends shaping the France Condominiums & Apartments Market according to our research experts:
France's Rising Apartment Prices
French home prices increased by 150% (or 112.5% when adjusted for inflation) during the lengthy property boom that ran from 1997 to 2007. The French housing market has not changed much since then.
In 2008, the market began to deteriorate. Price increases since then have been minimal, as have price drops. In 2012-2015, home prices decreased by 1.7% annually on average before beginning to rise in 2016.
House prices rose 6.4% in 2020 despite the epidemic, the greatest growth since 2010. In France, there are no limitations on foreign ownership. Property is often freehold. The two main freehold ownership structures for apartments are co-ownership (which requires meetings of co-owners when decisions are made and accounting is kept) and volumes, which are typically designed for mixed-use complexes. There are leaseholds as well, lasting up to 99 years.
According to the La Chambre des Notaires de Paris, the average apartment price in Île-de-France, the wealthiest and most populous region of the nation, increased by 2.1% year over year (or 0.7% inflation-adjusted) to EUR 6,710 (USD 7,665) per square meter. The average price of an apartment in the Petite Couronne increased by 4.5% year over year (3% inflation adjusted) to EUR 5,390 (USD 6,157) per square meter. The average price of an apartment in the Grande Couronne climbed 4.1% year over year and 2.7% inflation adjusted to EUR 3,290 (USD 3,758) per square meter. Apartment prices in Hauts-de-Seine, one of the most populous departments in the nation, grew 4.3% year over year and 2.9% when adjusted for inflation, reaching EUR 6,590 (USD 7,528) per square meter.
Increasing sales of Apartments
According to the General Council for the Environment and Sustainable Development (CGEDD), existing home sales in France decreased by just 4% in 2020 compared to the previous year, reaching 1,024,000 units, the second-highest level ever recorded (existing home sales increased by 9.1% annually from 2015 to 2019). However, according to the Ministère de la Transition Écologie, new home sales decreased by 22.8% year over year to 101,259 units in 2020.
Existing house sales increased by 22.6% year over year in August 2021 to an annualized 1,208,000 units, indicating that demand is currently rising rapidly. Additionally, compared to the same period last year, new home sales increased significantly by 29% to 61,718 units in the first half of 2021. In the same time frame, sales of newly constructed single-family homes jumped by 19.5% to 4,036 units, while sales of new apartments increased by 29.7% to 57,682 units.
With an estimated 1.1 million sales by year's end, 2022 should approach the previous high set in 2021 in terms of transaction volume. Despite the news and the debate around the rate of sale cancellations, it appears doubtful that there will be fewer than one million sales. According to this scenario, a quarter of the pledges of sale would really be canceled before the deed of sale was finally signed by the end of the year, even though the yearly average of canceled sales is currently at its highest point, often between 2% and 3%.
