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Over more than ten years, France has experienced a twofold increase of residential housing prices. This was largely fuelled by the credit conditions and a general fear of the future. A strong negative correlation between initial price level and its increase leads to a massive trend of spatial homogenization of the prices. Such a tendency is fairly vigorous in the metropolitan area of Marseille, and particularly in its extremely poor and long devaluated centre, where prices have risen by over 200% since the mid-1990s. This real estate market evolution is emblematic of Neil Smith’s rent gap hypothesis. Yet, a detailed survey of spatial differentials of price increase shows that contiguous central neighbourhoods with similar price levels before the recent tremendous upsurge are affected by appreciably different price rises. Therefore, this unequal price evolution cannot be understood without a clearer analysis on the ‘potential land value’ than provided by Smith’s model. In the context of such housing price increase and uncertainty, prices transmit noisy signals to investors. Thus, State involvement, as in one of the most important operations of urban redevelopment nationwide (Euroméditerranée), appears as a guarantee for investors and also accounts for the spatial differentials of price growth rates.
