Holiday Rentals News - French property sends mixed messages

French property sends mixed messages

Leading financial institutions are divided over what is happening to the housing market in France, and what this might mean for property investors.

Official figures have shown that new housing build fell by 19 per cent in the first quarter of 2008, and HSBC and Credit Agricole have reached highly different conclusions about what this means.

HSBC cites the credit crunch and large numbers of unsold properties still on estate agents' books from 2007 as grounds for predicting a drop in prices of four per cent this year for new homes.

However, Credit Agricole – France's largest retail banking group – has drawn the conclusion that prices will stabilise this year.

The two banks also disagree about the future prospects for older properties, with HSBC predicting a slight decline and Credit Agricole a sharper descent.

Last week, meanwhile, Trisha Mason, founder and managing director of Vivre En France (VEF), predicted a rise in prices for older French properties.

Indeed, French estate agents' body FNAIM recently published figures showing a 0.4 per cent rise in April for older properties, and a 1.3 per cent increase for houses.

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