Tuesday, December 08, 2009
French house prices in 2010
It's that time of year again when all the agents, banks, building societies and public bodies make predictions for UK house prices in 2010. Even the BBC are getting in on the act.
Here in France the price of ones house doesn't hold the same kind of compulsive fascination as it does across the channel. Houses are somewhere that you live and watch your family grow up in. The French move house far less regularly than us Brits (I have a vague notion that on average we move 16 times in our lifetime but please don't accept that as gospel) and aren't used to seeing it's value bob up and down like a yo-yo.
If there's one thing I've learned during my twenty odd years in the property industry it's that it is an absolute lottery predicting house prices. All of the august bodies mentioned above have teams of highly paid researchers that crunch the numbers, analyse the statistics and then make a wild guess while adding in all kinds of caveats.
At the start of 2009 almost everyone predicted a year of double digit percentage falls in price. Yet, if the HM Revenue & Customs are to be believed house completions rose from 41,000 in January to 90,000 in October.
The Nationwide say that if prices remain unchanged this month that they will have increased 6% throughout the year. Many other lenders tell a similar story with the Halifax saying that prices are now up for the 5th month in a row.
It's a different story over here in France and the FNAIM are saying that average prices are likely to have dropped by around 5% this year. You can read their latest statement here.
At a local level I'd say that this seems pretty bullish indeed.
Sure, window prices don't seem to have changed much when you trawl around the estate agents, but if you pluck up courage to go through the door and chat to them about actual sale prices you get a different picture and a lot of anecdotal evidence of double digit falls.
It's incredibly difficult to get a clear picture here where real data is so hard to come by. What is clear is that overseas buyers are scarce and it was they who tended to pay the premium prices.
Locals are still buying houses and while transaction numbers are down the underlying market remains pretty healthy and will be so in 2010 again I'm sure.
What nobody knows is whether the overseas buyers will be back in force next year. If not then prices will remain pretty stable but if they do come back then be prepared for some increases again.
For these buyers to re-enter the market they will need confidence that the world economy is not going to nose dive again and that we're coming out of recession not heading back into it again. Confidence means everything when it comes to buying houses and although it seems to be returning it won't take much to knock it back.
Ultimately the most prudent prediction for house prices in 2009 came from the Council of Mortgage Lenders. They simply said that it was too difficult to call the market and they refused to get involved.
Guess what.....they're saying the same thing about 2010.