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 So tell me – what made you click here? Was it “French property market” or “Perpignan is a great place to buy…”? Well, before you click away again, check this out. Yes, I have some French property market figures for you. But first, Perpignan. It’s a lovely place (and I’ve just written a rather enthusiastic article about Perpignan and three other cool Languedoc cities – you can read it here, but I mention it because it’s a neat way of illustrating what might seem at first glance some slightly dull information.
 Now, hands up who knows what FNAIM stands for (and there’s extra points if you can pronounce it correctly). Give up? It’s the Fédération Nationale de l’Immobilier, otherwise known as the national association of French estate agents’, and their monthly report (you can see it in detail at www.fnaim.fr) looks at the state of the resale market for both houses and apartments, based on around 10,000 property sales across France.
Slowing Down...
The FNAIM report for the third quarter 2006 was issued at the beginning of October, and it shows that in comparison to the same time last year prices have risen by 7.6%. This is a big different to the heady days of summer 2004 when property prices increased by 15.5 per cent, or even 2005, when prices were rising at an annual rate of 10.3 per cent.
I hate to get all “woulda, coulda, shoulda” on you, but if you look back at the figures from just the start of 2006, you’ll see a pattern emerging. We’ll take the city of Perpignan as an example (did you wonder when I was going to get back to Perpignan?). Located far down in south west France, in the Roussillon part of the Languedoc-Roussillon region (i.e. heading west towards Spain), Perpignan’s property prices have been rising over the last year, albeit at a gradually slowing rate. Imagine you wanted to purchase a pied-à-terre in Perpignan. Great idea! It’s a small but lively city with plenty of Catalan influence, and it makes the perfect base from which to explore south west France and down into Spain (the border is practically within spitting distance). It’s close to the mountains (handy for winter sports breaks in the more accessibly priced and less crowded Pyrenean resorts) but within easy driving distance of the Med – so perfect for sun worshippers and snow bums alike.
OK, enough already about the perks of Perpignan: here comes the maths. If you’d been smart enough to buy a city centre apartment here in 2005, chances are you would have paid an average €1,798 per square metre (FNAIM average annual figure for resale apartments in Perpignan for 2005). So for an average, two-bedroom, 90 square metre flat, you’d be looking at a budget of some €161,820. Factor in another ten per cent for notaire’s fees plus other costs associated with the sale and a small contingency budget (many agents will tell you to allow 6-7 per cent for notaire’s fees, but if you add on a nice round ten per cent, you won’t come unstuck or find your sums don’t add up later on) and you’d have shelled out around €163,438. Do the same exercise six months later, and according to the FNAIM figures for the first half of 2006, the purchase price (plus ten per cent) would be in the region of €171,437 .
Repeat the maths once more (stay with me, people), using the average figure from the latest FNAIM report for the third quarter (€1,905 per square metre), and you’ll be shelling out €173,164 for the very same property. Nine months down the line and you’re paying nigh on ten thousand euros more, for … what exactly? Oh yes – the very same apartment. My point here is: in the time it takes some couples to start a family, you could be quids out. Alternatively, you could bite the bullet, buy the flat and be quids in (sort of).
René Pallincourt (President of the FNAIM and a man who knows about these things) says “le ralentissement de la hausse des prix se poursuit”, which roughly translates as “house prices are still growing at a slower rate”. So if you were planning to invest in Perpignan and make a killing, you’ve missed the boat, but if you fancy bagging a holiday flat in a very well situated city served by budget flights out of the UK, with a strong cultural identity and plenty going on to keep you entertained, Perpignan could be just what the doctor ordered. I don’t have a crystal ball so I can’t tell you what property prices will be doing nine months from now, but I’d say there’s a good chance they’ll have still increased enough to make you wish you’d struck while the iron was (relatively) hot.
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