Taxation preserved for a few months, lending rates still low and more reasonable prices, the lights are green for those with a real estate project.
The property prices will drop? Buyers and sellers are wondering. In some French cities, the movement had already begun. But the capital was up this summer in an upward spiral. This thing of the past. Even in Paris, a city symbol of the folly of prices (they rose by over 20% in one year), the market is going to calm down. Notaries even expect a slight decline in prices in the former. A trend reversal.
The bull market, so it’s finished. And that’s good news. Buyers could not keep this price increase and the pace frantic dizzy. According to lawyers, the square meter in the former reached € 8,150 on average in late June in the capital. “Trees do not go to heaven, prices have landed. The promise of sale signed this summer will lead to lower prices on sales to be signed in October, “said Mr. Lefebvre, President of the Chamber of Notaries of Paris and the Ile-de-France. According to the barometer meilleursagents.com, “Parisian prices fell 3% in two months this summer, after twenty-seven months of continuous rise.”
Rising prices also began to discourage the heat and there were fewer transactions in recent months in Paris and especially in the provinces. But again, observers expect a change in trend due to the sale of new goods in the months ahead. The brutal reform of the taxation of capital gains should indeed push some homeowners to sell property in the coming weeks to escape the tightening of taxation.
Today, sales of houses and apartments other than the principal residence are indeed exempt from tax on capital gains after two years. From 1 February, it will take thirty years, twice as long. To continue to benefit from the old regime, much more favorable, it is in practice a trade or signing a sales agreement before the end of November. “This passenger tax relief should automatically increase the volume of sales in the first place. Then, a reflux is possible. There is a window of opportunity for sellers and buyers, who still benefit from low interest rates and credit easily accessible, “said Mr. Lefebvre.
Some real estate agents already seeing the first effects of the reform. “We recently signed a compromise in which sellers have made a major effort of negotiation to sell before being affected by this law,” indicates, for example, specialists of the agency Emile Garcin. Indeed, owners of rental homes or with their good side for several years (but less than thirty years) will see their tax increase in the sale. Their strategy is so simple: find a buyer quickly, even accepting the way, if necessary, to reduce a little the sales price. “We expect a significant increase in the number of properties for sale in the former, especially for second homes. We just set up a simulator on the site Explorimmo to calculate the tax on capital gains from February 2012. We recorded over 1000 simulationslors the first day, “said William Teilhard de Chardin, director Explorimmo (Groupe Figaro), which is also an increase in the supply of new developments on the site.
A market that is still looking
Beyond what can be considered as a windfall, the holding of the property market next year is more difficult to predict. How the French will they react once the reform of property taxation in place? What will the impact of the worsening economic climate? And the presidential election? “I am perplexed.When one compares the findings of Notaries on the different parts of the territory, there are wide disparities, even within the same region or in nearby cities economic profile, “notes Ms. Bazaille, president of the Institute solicitors. “It is difficult to understand what is happening,” he says.
In an economic environment that has hardened considerably, opposing forces are in action today. On the one hand, the collapse of the actions, concerns about banks and financial investments leave the best part of real estate, which appears as a safe haven. On the other, the reform of capital gains property, announced fiscal tightening and concerns about growth and employment play in reverse. Result, prices change often contradictory. To help you decipher a difficult market to read, you will find in our case an extensive tour of France real estate prices in over 1200 French cities. Prices provided by notaries who are therefore based on the actual amounts of transactions.
The real estate market is not unique, it is not always logical. Some real estate agents have seen, until recently, apartments or houses from beyond their estimate, because a buyer has had a helping heart. If some good deals (the seller) have been achieved, it is more risky to rely on it. “Buyers have become more fussy, budgets are tight and decisions are taking longer,” said Stéphane Imowicz, the Land Bank. Anyone looking for an apartment or a house note on today’s overpriced apartments and houses no longer find takers.
Some areas look more at idle than others. Notaries evoke such a decline in activity in the north, central and eastern France. They believe that “the end of 2011, approximately 40% of old real estate markets in the provinces should be down at the end of last year.” According to Mr. Bazaille, those seeking a second home in Normandy or a pied-à-terre in the mountains, markets more or less stopped, for example, are in good position. “Often, the prices have declined somewhat, but we begin to see negotiations on the order of 10% in some cities,” says he.
The high-end stand still
But careful not wishful realities: markets tense like Paris and Lyon notably price decreases could according professionals having line thickness. “We have a very good month of August after a strong first half. The market for luxury real estate is held in Paris very well, “says Charles-Marie Jottras, Féau president who does not believe in a price collapse in Paris because of the distrust of individuals vis-à- vis financial market accentuated by crash and crisis eurozone. This distrust benefits the stone. Charles Marie Jottras expects however “price stabilization segment apartments bourgeois 1.5 to 2.5 million.»
The weight of the financial crisis
Another unknown hanging over the housing market. What is the attitude of banks in terms of credit? They continue to leave open the tap the credit or will they be more selective in choosing borrowers due to their capital problems?The question is open. Borrowers who have a good record should continue to find credit no problem, but those whose situation is more tense may have more difficulties in 2012 and 2011.
Anyone who has a real estate project, purchase or sale, are at least good reason to tackle it. Over the coming months, they should benefit from further interest rate credit, lines of trading on certain goods in some markets and more attractive as a tax for investments Scellier for capital gains. Until the end of the year, it is possible to benefit from a tax reduction of 22% by purchasing a Scellier well within the limit of € 300,000. After January 1, the rate will be significantly reduced. “The fact that the rate of reduction of tax Scellier from 22 to 14% next year will encourage many French people to buy by the end of the year. If they choose an apartment well placed and well connected they are right, “said Christian de Gournay, the Executive Board of Cogedim prédident.
In nine, the first half was generally disappointing with lower sales of around 20% over first half 2010. Several developers have started to make small gestures commercial (for example by providing notary fees), but many rely on the last months of the year to boost purchases. “I am relatively calm at the end of the year, as rates remain low and investors will want to take advantage of the current rate of tax reduction of Scellier,” said François Bertière, president of Bouygues Immobilier. After the price increase in nine in the first half, the developers also feel the need for things calm down. “I hope that prices will weigh,” says François Bertière while seeking greater visibility on the tax arrangements.
The draft budget law for 2012, to be presented next week, give some first answers. Answers that the French will be sensitive. Lovers stone also situated reagents to taxation measures. Beyond the next few months, keeping the housing market will also be closely linked to the economy. Invest in long-term debt load is primarily a matter of trust.