French property market report N° 12 - JULY 2011

display prices that are slightly down: INSEE Market of old apartments Market of old houses Bourges (-1.3%), Besançon (-1.3%), Rouen NOTARIES (-0.5%) and Amiens (-0.5%). Only INDEX Index Index Variation* Variation* has suffered a significant fall of -6.5%. value value (INSEE- Where houses are concerned, five conurba- labeled) 2010 2011 3 1 2010 2011 3 1 tions recorded negative developments: Caen months year months year T4 T1 T4 T1 (-1.6%), Montpellier (-5%), Saint-Etienne Metropolitan (-5.3%), Nancy (-0.3%) and Metz (-11.4%). 226,7 231,1 1,9 % 10,5 % 196,7 195,0 -0,8 % 7,8 % In the last of these, this strong fall can be at- Île-de-France 235,9 245,9 4,2 % 16,5 % 186,0 188,7 1,5 % 8,3 % tributed to the growth in the share of small houses (4% in the first quarter of 2010 com- Provinces 218,3 217,5 -0,4 % 4,9 % 200,4 197,3 -1,6 % 7,6 % pared with 14% in the first quarter of 2011). * 3-month variation: development between 2010T4 and 2011T1 * 1-year variation: development between 2010T4 and 2011T1. but not at national level, as in the 4th quarter of ■ The new-build market: the 2010, we saw a 9.2% increase for apartments PTZ+ (zero-rate loan) effect and 9.6% for houses. Analysis The indices for that quarter show that the appears to be some way off price of apartments rose 10.5% in one year, After the reduction of the tax breaks linked while that of houses increased by 7.8%. ■ The resale market: an to buy-to-let investment and the disappea- This divergence between the two markets is rance of the Pass Foncier, the volume of increasingly diverse and confirmed over the last three months: +1.9% sales in the first quarter of 2011 equates for apartments, compared with -0.8% for active market to the lowest level recorded since the 4th houses. Two reasons for this situation are quarter of 2008, with just 22,2000 properties apparent: the first of these is property Volumes no longer catching up ? sold, 17.2% fewer than in the first quarter of prices that are compelling a large section After the significant fall seen in late 2008 2010 (-15.9% for apartments and -26% for of purchasers to turn towards the acquisi- and in the first half of 2009, the sales volume individual properties). tion of apartments, which are generally less for resale properties in France as a whole However, the number of properties placed expensive than houses, while the second is has risen steadily since and reached 806,000 on the market grew by 4.2% in a year (+6.5% the attraction of property investment in col- between April 2010 and 2011, a 23% for apartments and -10.9% for houses), lective housing, due to the “safe investment” improvement on the same period a year ear- increasing time to market in certai regions. factor that offers less random performance lier. However, this development has waned The novelty of the PTZ+ will certainly require than the stock market. since the start of the year, as between 2009 a greater period of adaptation than antici- In the first quarter of 2011, 21 departments and 2010, the increase reached +32%. In pated in order to compensate for investors’ had apartment prices which were down ove- the 1st quarter of 2011, over the provinces losses. Where prices are concerned, rall on the previous year and 32 for houses, as a whole, volumes were up 24% on the annual rises of 6.8% for apartments and while only 12 departments registered rises 1st quarter of 2010, but down 3% in relation 2.8% for individual houses were recorded greater than 10%, for flats as well as houses, to the 4th quarter of 2010. This seasonal for the 1st quarter of 2011; these are due including Ile-de-France. fall is normal. In Ile-de-France, the number in particular to the property tax rise in the If we examine this in more detail, this dis- of properties sold in the first quarter of 2011 last two years and the effect of the new BBC parity between apartments and houses showed a slight contraction (-4%) compared (low consumption building) standard. On exists both in Ile-de-France and in the pro- to the 1st quarter of 2010, so it is necessary to the apartment market, 4 regions display vinces, as the change in apartment prices wait for the figures for the next quarter in or- prices that have dropped slightly (up to -2%): over a year for the Paris region is 16.5%, der to verify whether this trend is confirmed. , Limousin, and Bourgogne. with a considerable deviation between Paris Conversely, in Haute-Normandie, Pays de (+20.8%) and Essonne (+5.8%), for example; Increasingly marked price variations la , -, and the same goes for houses, with +17.4% in The analysis of the prices of resale properties PACA, new-build prices have risen between Hauts- de-Seine and +3.7% in Seine-Saint- (houses and apartments) during the course of 10% and 13%. Denis. As for the provinces, the price falls for the previous quarters revealed development apartments are fairly contained; four cities disparities from one department to another,

French property market report NOTAIRES DE FRANCE - N° 12 - July 2011 Outlook

In terms of the new-build market, we will property market is subject to positive as price trend, with their proportion increas- have to await the draft of the new finance well as negative parameters: admittedly, ing from roughly a quarter to a third. law in the autumn before assessing dy- interest rates are climbing, making the This trend will be moderate and in no namism over 2011 as a whole. property market unviable for a fringe of cases in two figures like in 2010, as this This is because the market is particularly consumers, particularly first-time buyers, increase is essentially due to an adjust- dependent on investors (2/3 of sales in whose numbers have fallen by 3 points ment effect at national level. If we are 2010) who require reassurance regarding for apartments and 2 points for individual indeed witnessing a deterioration of the the tax adjustments already announced, dwellings. But at the same time, the PTZ+, euro and dollar currencies, the resulting but may not receive it as long as the can- which is particularly well suited to the rise in interest rates would change the didates for the presidential election have resale market in the provinces and to new- property market very significantly, for not declared their plans in this area. builds incorporating energy-saving stand- first-time buyers in particular. Having said that, it now appears safe to ards in the large cities, is making home It could be disastrous if this economic predict that the volume of new-builds in ownership viable for a certain number situation was exacerbated by a greater 2012 will not reach that of 2010, namely of first-time buyers, not all of whom are tax burden, as let’s not forget, if we were 115,000 apartment sales. simply buying their own council homes. to experience a fall in volumes and the For resale properties in 2011, judging by Similarly, the uncertainty of the economic corresponding reduction of ownership the volumes from the first five months situation is intensifying the principle of transfer taxes, the budget situation of and as we have already announced, the property as a “safe investment”. the local authorities would be very con- number of sale contracts signed is likely Where prices are concerned, a rise has siderably affected.. to be down slightly on 2010 (782,000 sales). been recorded in the number of depart- However, nothing is certain yet, as the ments and cities displaying a negative

Average price per sq.m. of older apartments Development over 1 year: 1 January 2010 to 31 March 2010 / 1 January 2011 to 31 March 2011

Lille Amiens € € 2 973 2 066 17,8 % Rouen -0,5 % € 2 211 Reims -0,5 % 2 225€ 11,3% Nancy Caen 1 837€ 2 149 € 4,9 % Rennes 6,1 % 2 210 € 9,4 % Strasbourg Paris € € 2 405 Tours 7 780 10,2 % 2 087 € 20,8 % 15,9 % Bourges Besançon Nantes 1 405 € 1 707 € 2 500 € -1,3 % -1,3 % 10,7 % Dijon 2 113 € Poitiers 4,8 % 1 542 € 0,9 % 1 548 € Lyon 3 024 € NS Limoges 1 182 € Clermont- 10,1 % La Réunion € -6,5 % Ferrand 2 440 1 530 € Nice Grenoble € 6,4 % 6,2 % 2 369 € 3 581 Bordeaux 2,2 % 7,4 % 2 687 € 11,1 % Toulon Annual change 2 226 € in price per sq. m. 0,2 % Toulouse Less than 0 % 2 475 € Haute-Corse 7,2 % € From 0 % to 5 % Montpellier Marseille 2 322 2 576 € 2 462 € 20,1 % 5 % plus 7,7 % 6,0 % ns = not significant (the volume of sales does not permit the calculation of suitable statistics) Corse-du-Sud Source: Notaires de France property database (the prices in Île-de-France are an evaluation 2 750 € of the INSEE notaries index for the 1st quarter of 2011). Outside Île-de-France, the prices 9,1 % have been calculated based on an average volume of 150 transactions per city and per quarter Average sale price of older houses Development over 1 year: 1 January 2010 to 31 March 2010 / 1 January 2011 to 31 March 2011

Amiens Lille 154 300 € 171 500 € 7,2 % 6,0 % Rouen Reims 180 500 € 195 500 € 16,1 % 2,1 % Caen Metz 182 000 € 165 000 € -1,6 % -11,4 % Brest 160 250 € 4,1% Nancy 162 000 € Tours Île-de-France -0,3 % 200 500 € 302 200 € 11,4 % 8,3 %

Nantes 242 975 € Orléans 16,0 % € 195 000 Dijon 2,6 % Saint-Étienne € € 220 250 Poitiers 170 000 1,5 % 154 380 € -5,3 % 7,3 % Lyon € NS 286 100 Limoges 7,9 % La Réunion 145 000 € 210 000 € 7,4 % 10,5% Grenoble 289 000 € Bordeaux 2,0 % 244 250 € Annual change 12,0 % Toulon in sale prices 335 000 € 6,0 % Less than 0 % Toulouse De 0 % à 10 % 250 500 € Haute-Corse Montpellier Marseille / € 10 % plus 4,4 % 274 250 € Aix-en- 165 000 -1,5 % 296 090 € -16,6 % ns = not significant (the volume of sales does not permit the calculation of suitable statistics) 4,0 % Source: Notaires de France property database (the prices in Île-de-France are an evaluation Corse-du-Sud of the INSEE notaries index for the 1st quarter of 2011). Outside Île-de-France, the prices € have been calculated based on an average volume of 150 transactions per city and per quarter 270 000 -27,0 %

Price per sq. m. of new housing in 1st quarter of 2011 (apartments)

Nord-Pas- Picardie de-Calais 3 179 € 3 148 € - 0,8 % Ardennes Haute-Normandie 5,7 % € 3 178 € 3 071 10,5 % 0,4 % Lorraine Basse-Normandie 2 473 € 3 335 € -1,9 % Bretagne 0,8 % 2 985 € 7,0 % Île-de-France 2 940 € 4 719 € 7,6 % 2,3 %

Pays-de- Franche-Comté la-Loire € € 2 724 3 390 7,4 % 13,0 % Centre 3 029 € Bourgogne 5,0 % 2 809 € Poitou-Charentes -0,7 % 3 572 € 12,3 % Rhône-Alpes NS 3 647 € Limousin 8,0 % 2 400 € -1,6 % 2 599 € 0,6 % Aquitaine 3 469 € PACA 10,7 % 4 227 € 10,9 % Price development per sq. m. Less than 0 % Corse Midi-Pyrénées € € 3 322 From 0 % to 5 % 3 397 - -1,5 % 3,8 % 5 % plus 3 336 € ns = not significant (sales volumes 5,3 % do not permit the calculation of suitable statistics) Source : FPI / ECLN / CGDD / SOeS French property market report NOTAIRES DE FRANCE - N° 12 - July 2011 Housing indices

France: the property price index for France as a whole is calculated by the Notaires de France in partnership with International comparison: property price index compared the INSEE. This index is published eve- to the income available per household ry three months and uses the hedonic Base 2000=1 pricing method. The data results from sale France documents transmitted by the notaries. United States United Kingdom United States: the FHFA index produced by the Federal Housing Finance Agency, a US government body, measures the development of the price of individual houses based on a sample of mortgage loans, using the repeated sales method. United kingdom: the DCLG index is the official house price index published by the British government, based on a sample of mortgage loans. It uses the hedonic pricing method. Source: CGEDD according to INSEE, notarial databases, deseasonalized INSEE Notaries Indices, Freddie Mac, FHFA, R.Shiller, US Bureau of Economic Analysis, Census Bureau, Bureau of Labor Statistics, UK DCLG, UK National Statistics. Graphic downloadable at: http://www.cgedd.developpement-durable.gouv.fr/rubrique.php3?id_rubrique=138.

MarchéMarchéMarché du du foncierdu foncier foncier : : : DevelopmentDevelopmentMarché du foncier of of ofprices prices prices: over over over 10 10 year10 year years / sEvolutions / /Evolution Evolution of the of of aethe thera aes ae overrarass over10 over year 10 10s year yearss The land market Development of prices over 10 years / Evolution of the aeras over 10 years In 2010, the average price of building plots Nord-Pas-de-CalaisNord-Pas-de-CalaisNord-Pas-de-Calais Nord-Pas-de-Calais 123% /-20% intended for the construction of individual dwel- 123% /-20% 123%123% /-20% /-20% lings varied in a proportion from 1 to 5 between Champagne ChampagneChampagneChampagne Ardenne ArdennArdenne e Limousin (€25,000) and Provence-Alpes CôteHaute-Normandie 101% /-11% Ardenne Haute-NormandieHaute-Normandie 101%101% /-11% /-11% 140% / 4% Haute-Normandie 101% /-11% € € 140% / 4% Lorraine d’Azur ( 128,000). With Ile-de- France ( 113,000), Picardie 140% / 4% Lorraine Basse-Normandie 140% / 4%66% /-6Picardie% Picardie Lorraine a single other region, la Réunion, exceeded Basse-Normandie138% /-18% Picardie 66% /Lorrain-6% e 139% /-4% Basse-NormandieMarché du foncier : 138%138% /-18% /-18% 66% /-6% € Development of pricesBasse-Normandie over139% 10 year /-4%s / Evolution of the aeras over 10 years 138% /-18% 66% /-6% 100,000. Ten regions of metropolitan France 139%139% / -4%/Ile-de-France-4% Nord-Pas-de-Calais88% /-11% Ile-de-France have a price of around €50,000 (+/- 10%). 123% /-20% Ile-de-FranceAlsace Bretagne 88%Ile-de-France /-11% 91% /-17% Champagne 79% /-12% The average surface area of the plots varied Bretagne 88%88% /-11% /-11% Alsace Bretagne Ardenne Alsace € Haute-Normandie 91%Bretagne /-17%101% /-11% 79% /-12%Alsace between 481 per m² in Languedoc-Roussillon 140% / 4% Centre Bourgogne 91% /-17% Lorraine 79% /-12% 126%91% Picardie/-23% /-17%135% /-12% 79% /-12% and €1,528 in Limousin. The more expensiveBasse-Normandie 138% /-18% 66% /-6% Franche Pays-de-la-Loire139% /-4% CentreComté Bourgogne the land, the smaller the plot. The dispersion106% /-22% of Ile-de-France 126%103%Centre /-23%Centre /-7%135%BourgogneBourgogne /-12% Franche 88% /-11% Bretagne Pays-de-la-Loire Alsace126% /-23% 135% /-12% ComtéFranche prices per m² is therefore greater than thatPoitou of 126% /-23% 135% /-12% Franche 91% /-17% Pa106%ys-de-la-Loire /Limousin-22% 79% /-12% 103% /-7% Charentes Pays-de-la-Loire ComtComtéé the prices of plots: the average m² in Provence- 106%44% /-22% / 5% Rhône-Alpes 112% /-25% 106%Centre /-22% Bourgogne 114% /-22% 103%103% / -7/-7%% 126% /-23%Poitou135%Auvergne /-12% Franche Alpes-Côte d’Azur is worth twelve times more Limousin Pays-de-la-Loire Charente69%s /-11% Comté 106% /-22% Poitou 103% /-744%% / 5% Rhône-Alpes than that in Limousin. 112%Poitou /-25% Limousin Aquitaine Charentes Limousin 114% /-22% Poitou Auvergne Rhône-Alpes In ten years (2001–2010), the prices per m²80% in / Pro-13%- LimousinCharentes 44% / 5% Rhône-Alpes Charentes 112% /-25%Rhône-Alpes 44% / 5% 44%112% / 5% /-25% PACA 69% /-11% 114% /-22% 112% /-25% 114% /-22% Auvergne 114% /-22% vence-Alpes-Côte d’Azur have multiplied by 3.5. Auvergne 130% /-33% Auvergne 69% /-11% They have also more than tripled in the Picardie Aquitaine 69%69% /-11% /-11% Aquitaine 80% /-13% 80% /-13% and Centre et Nord-Pas-de-Calais regions and Aquitaine PACA PACA Aquitaine Languedoc 130% /-33% 130% /-33% 80% /-13%Roussillon have at least doubled everywhere else with the 80% /-13% PACA Midi-Pyrénées 82% /-35% Corse PACA sole exception of Limousin. In order to reduce 100% /-13% 130% /-33% Languedoc ns/ns 130% /-33% Roussillon the impact on the price of the houses, the size Midi-Pyrénées 82% /-35% Corse Languedoc 100% /-13% ns/ns of plots has been reduced in almost all of the Average sale price in 2010 Roussillon Midi-Pyrénées 82% /-35% Corse Over €100,000 Languedoc regions, sometimes to a significant extent: - 35% Average sale price in 2010 100% /-13% Languedoc ns/ns From €75,000 to €100,000 Roussillon in Languedoc-Roussillon or –33% in Provence- Over €100,000 Midi-Pyrénées Roussillon FromFrom €7 5,€50000, 0to00 €100 to,0 €0075, 000Midi-Pyrénées 82%82% / -35%/-35% CoCorsrsee Alpes-Côte d’Azur (map). In contrast, it has increa- FromLess €5 than0,000 €5 to 0,€75,000000 100%100% / -13%/-13% ns/ns Less than €50,000 Average sale price in 2010 ns/ns sed in Limousin and remained stable in . ns : not significant ns : not significant Over €100,000 AverageFrom €7 5,sale000 price to €100 in 2010,000 Ile-de-France has seen its average plot size drop by 11% and the averageAverage price sale rise price by just in 2010 88%, given that 15 out of the 22 FromOver €5 0,€1000,0 to00 €75, 000 regions of metropolitan France excluding Corsica have seen a larger increase.LessOver Does than €1 €500this0,,0000 00suggest that the plots sold in 2010 are, FromFrom €7 €75,5,000000 to to € €100100,0,00000 for example, more outlying than in 2001, or that the individual house is losingns : not popularity Fromsignifican €5t 0, 0in00 Ile-de- to €75, France?000 The fact that the price index for resale houses there has increased less than in the provinces (74% insteadFrom of€5 84%)0,000 lends to €75, weight000 to the second hypothesis, LessLess than than €5 €50,0,000000 but only the development of a land price index would make it possible to be certain. ns : not significant 1-The developments observed in Corsica and in the overseas territories,From with the exception of Guadeloupe, are not significant.ns : not significant

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Contact: Olivier Pavy, Director of Economic Affairs – High Council for the Notarial Profession. Editorial Committee: Pierre Bazaille, Thierry Delesalle, Michel Pagès and Olivier Pavy. Published by: Conseil supérieurFrom du notariat - 60 bd de La Tour-Maubourg - 75007 Paris - Tel. 01.44.90.30.00 - www.notaires.fr. Design and creation: Bureau de Création - ISSN : 2100-241X

French property FromFrom market report NOTAIRES DE FRANCE - N° 12 - July 2011