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Dear readers,
Emmanuel Macron’s € 10 billion package of measures has surely contributed to predictions of economic growth above the European average in France this year. The fact that France has significantly lower exports than Germany, and is therefore less dependent on the global economy, is an even more significant factor. That is currently benefiting our economy. And the real estate market is also in good shape. In fact, it's in such good shape that demand is now outpacing supply – particularly in the office segment. Vacancy rates of 2.3% in Paris and 5.4% in the region demonstrate that very clearly. While construction continues apace, demand is simply too high. Interest from foreign investors also remains high. The market continues to boom, and there is no end in sight for the cycle.
Anne-Isabelle Carbonnières
Contact
Ms Anne-Isabelle Carbonnières
Managing Director France
Phone: +33 1 550 484 85
E-mail: Anne-Isabelle.Carbonnieres@Deutsche-Hypo.de
Following significant negative development at the end of 2018, which brought the French REECOX into line with the rest of Europe, there was a turnaround in the first quarter of 2019, with positive development over all three months compared to the preceding months. That resulted in a total rise of 3.2%, to 228.3 points.
The rate of change differed among the input variables. The French leading share index CAC 40 recorded significant growth: from a closing level of under 5,000 points in January, it climbed relatively consistently to approximately 5,350 points at the end of the quarter. That represents an increase of 13.1% compared to the previous quarter.
The real estate leading share index FTSE EPRA/NAREIT France also played a significant role in the overall development of the REECOX. Following a clear jump in January, it rose slightly in the following months to its current level of 3,733 points. That resulted in a total increase of 14.3%.
However, that general positive trend is not reflected by expert assessments as measured by the Economic Sentiment Indicator (ESI). Its level of 101 points in March 2019 represented a slight rise of 0.5%, and left it below the level seen in October 2016.
Country | Stock Index | Real Estate Economy Index | Economic Indicator | Base Interest Rate | Interest Rate 10-Year Government Bonds | Q4-18 | 01/19 | 02/19 | Q1-19 | Delta (%) Q4-18 / Q1-19 |
|---|---|---|---|---|---|---|---|---|---|---|
DE | upup | up | do | eq | do | 298.2 | 303.4 | 300.8 | 303.4 | 1.7 |
GB | up | upup | dodo | eq | do | 204.9 | 205.5 | 200.7 | 205.1 | 0.1 |
PL | up | upup | do | eq | do | 187.5 | 185.9 | 186.5 | 187.6 | 0.1 |
NL | upup | up | do | eq | do | 191.3 | 190.4 | 190.7 | 191.4 | 0.1 |
FR | upup | upup | do | eq | do | 223.7 | 225.4 | 225.9 | 228.3 | 2.1 |
ES | up | upup | up | eq | dodo | 191.8 | 196.4 | 196.5 | 199.3 | 3.9 |
