According to French Crédit Foncier real estate professionals have been increasingly optimistic about market trends since the beginning of year 2016. This major lender’s most recent polls show that 81 % of the eatate agent and other property pros deem the national market level as improving or stabilizing. And the situation is even more encouraging in the Ile-De-France region.
Last months of 2015 already indicated a change in the professionals’s evaluation when 71 % expressed a positive view on the market. This was a dramatic inflexion compared with year 2014 when 61 % professionals were considering the market as deteriorating.
Regarding the future 74 % of the realtors and other property professionals foresee serenity in the upcoming 12 months. Only 64 % of theme were expressing a similar opinion, four months ago.
Historically low interest rates, buying incentives and the new PTZ ( Prêt Taux Zéro – 0 % interest mortgage) are most commonly named among reasons for this good professional mood.
Those less optimistic put forward the weak growth of the economy and declining household purchasing power.
Regarding tommorrow’s selling prices, 57 % among professionals bet upon a price stabilisation for old properties. Most of them foresee a moderate growth of old properties transactions at 815 – 840.000, against 803.000 in 2015.
As for new houses, developers already registered more than120.000 reservations (102.500 last year) for a total that should reach 120.000 sales in 2016, against 111.300 in 2015.
Our comment: Despite this enthusiastic rethoric estate agents are just cautiously optimistic. Sales in 2016 should remain at the level of last year, that was not so bad. On the long term there is no reason for them to rejoice. In 2017, there will be two major elections in France. Considering the level of French public debt it is highly probable that the current buying incentives will consequentively be slimmed, as well as other public expenses, what will reduce again an already weak households purchasing power.
Thus, there might be a purchasing spree in 2016 but it won’t last. The downside pressure on property prices will remain a steady trend, with the exception of high demand areas like Paris and some other big cities.