November 30, 2017 / 11:22 AM / a year ago

French housing market heating up led by Paris

PARIS, Nov 30 (Reuters) - The rise in French property prices picked up pace in the third quarter, with the price of Paris apartments leading the charge as rock-bottom interest rates pushed the number of sales to an all-time high.

The French housing market has gathered strength in the last year and a half, after a gloomy four years which saw prices drop and the number of sales tumble following the introduction of new housing regulation and amid stubbornly high unemployment.

In the three months to end-September, house prices rose by 3.9 percent in France compared to the same period a year ago, gathering steam after increases of 3.1 percent and 2.5 percent in the previous two quarters, INSEE data showed.

The acceleration was most marked in Paris, where apartment prices jumped by 7.8 percent annually in the third quarter, compared with a 6.8 percent increase in the second quarter and 5.5 percent in the first three months of the year.

The number of sales in France also reached a record high of 952,000 in the twelve months to end-September, INSEE said.

The drop in interest rates brought about by the European Central Bank’s bond-buying programme has meant French buyers have enjoyed ultra-low mortgage rates.

They were last at 1.55 percent in October on average compared with around 4 percent in early 2012, before the ECB’s quantitative easing programme, according to Credit Logement data. (Reporting by Michel Rose; Editing by Leigh Thomas)

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