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Experts Worried That Property Bubble In France Set To Burst

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Wonder how much this is to do with us Brits no longer buying and being in our eyeballs up to debt?

http://www.homesgofast.com/view_news/2183/

The boom in prices of Property In France could be set to turn to bust with increasing numbers of experts expressing concerns about the state of the country’s property market.

The International Monetary Fund and the country’s Central Bank are amongst the authorities

concerned about the risks posed by a huge increase in property prices.

Property In France enjoying significant increase in value

News agency Reuters reports that that the value of Property In France rose by 8.7 per cent between the first quarters of 2010 and 2011, more than any other OECD country for which figures are available.

Prices in Germany rose by a modest 2.6 per cent over the same period whilst values in Ireland,Greece and Spain fell by 11.1 per cent, 5.6 per cent and 5.3 per cent respectively.

Since 2009, prices of Property In France are rebounding more strongly than elsewhere in the euro zone. Price growth hit a post global financial crisis peak of 9.6 per cent in the last three months of 2010 compared to the same period in 2009. Reuters reports that ‘the average increase for the euro zone in the same period was 2.8 per cent.’

Rising property prices in France posing problems

Moody's Investors Service believes that the French housing market is overheating and that less cautious lenders could face large losses if house prices were to fall significantly.

Analyst Stephane Herndl said: "French banking groups' inherent exposure to the country's housing market is the principal reason why a potential correction in house prices poses material credit risk.”

The quandary facing the French is that a market correction could affect the country’s financial stability whilst increasing prices are contributing to problems for the middle classes.

Bank of France Governor Christian Noyer said: “The continual rise in property prices is contributing to a perceived loss of purchasing power which in turn is fuelling wage claims.

"Indeed, rising property prices are a source of social malaise and economic rigidity because they prevent household mobility and exacerbate social inequalities.”

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Bank of France Governor Christian Noyer said: “The continual rise in property prices is contributing to a perceived loss of purchasing power which in turn is fuelling wage claims.

"Indeed, rising property prices are a source of social malaise and economic rigidity because they prevent household mobility and exacerbate social inequalities.”

By jove, I think he's got it!

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No doubt the expat civil servants chasing maison secondaires has been a factor in the problem. Prices in urban/coastal France seem just as nutty as here, albeit with much more rural areas which are a long way from anything being cheaper.

About 3 years ago I went to stay in France, near Bordeaux, with friends of mine who own a holiday home there. For the week beforehand I was worried about how poor my French was and whether I could get by.

We went to the local market a day after arriving and I was shocked to hear more British accents than French. There were people from all over the UK living there - the French loved them because there were few jobs in the countryside, the youngsters had moved to find work and the country towns were dying.

Plus, of course, the Brits had paid fortunes to buy up deserted wrecks of barns whilst most of the French were living in lovely newly built houses.

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The Charente seemed full of ex public sector Brits doing up derelict barns, in the middle of nowhere, then expecting the world to beat a path to their doors, to either B&B's or holiday lets (much to the bemusement of the French). Many expats having been retired or "on the sick" for stress. Mainly teachers.

Glad managed to sell to Brit for cash who had homes all over the place and generally just seemed to be rolling in it. Though I did have to bite my tongue a few times when my Brother in law kept insisting "property will go back up" because I'd been reading too much HPC.

As TMP pointed out in his post. The Brits tend to buy stuff the French don't want. so even the second home issue is not as bad as the UK.

Edited by John Steed

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By jove, I think he's got it!

Indeed, but what the hell's causing it? How come mortgage finance is so loose in France? Haven't they ehard it's not a good idea? or is this some government/French central bank boost a` la the last days of Brown?

Peter.

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We went to the local market a day after arriving and I was shocked to hear more British accents than French.

Nobody but tourists would pay the prices they charge in the open air markets. The French head for supermarket in their cars, just like the UK. The small boutique shops are equally all closing since you can get everything you need easier and cheaper in the out-of -town malls.

There were people from all over the UK living there - the French loved them because there were few jobs in the countryside, the youngsters had moved to find work and the country towns were dying.

Rural depopulation is ongoing problem. The villages are full of old people as the young move away for work and social life.

Plus, of course, the Brits had paid fortunes to buy up deserted wrecks of barns whilst most of the French were living in lovely newly built houses.

Every village around my way is the same. There is the old heart full of stone houses which are mostly maison secondaires. Right next to it are the new houses, where the residents live. Nobody wants to live in a damp, dark, mouse infested, cave. The land is almost given away and you only pay construction costs. They are keen to get people to come live there so the village doesn't die.

This idea of a price boom is mostly restricted the grande villes. The paysage has so much free land that any price rises will be met with new construction. Equally prices will not fall much since they are determined by construction costs. Lots of Brits buy old barns and renovate at greater cost than building new. They lose money since the final sale price is less than they spend.

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Nobody but tourists would pay the prices they charge in the open air markets. The French head for supermarket in their cars, just like the UK. The small boutique shops are equally all closing since you can get everything you need easier and cheaper in the out-of -town malls.

Rural depopulation is ongoing problem. The villages are full of old people as the young move away for work and social life.

Every village around my way is the same. There is the old heart full of stone houses which are mostly maison secondaires. Right next to it are the new houses, where the residents live. Nobody wants to live in a damp, dark, mouse infested, cave. The land is almost given away and you only pay construction costs. They are keen to get people to come live there so the village doesn't die.

This idea of a price boom is mostly restricted the grande villes. The paysage has so much free land that any price rises will be met with new construction. Equally prices will not fall much since they are determined by construction costs. Lots of Brits buy old barns and renovate at greater cost than building new. They lose money since the final sale price is less than they spend.

The Tour de France is coming through "our" village tomorrow. Will that put prices up?

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This is just simply misleading.

Paris can probably account for most, if not all, of the price rises.

Anywhere else in France worth living has at best been stagnant for a few years, at worst had a 15-20% fall.

Areas populated by holiday homes have dropped even more.

I seriously wonder how much these so called experts really know.

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This is just simply misleading.

Paris can probably account for most, if not all, of the price rises.

Anywhere else in France worth living has at best been stagnant for a few years, at worst had a 15-20% fall.

Areas populated by holiday homes have dropped even more.

I seriously wonder how much these so called experts really know.

We went for dinner with some friends last week. House on market for €245K, would happily accept €200K or less, paid €195K in 1997. Two acres, nice house, half a mile from nearest village.

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Rural depopulation is ongoing problem. The villages are full of old people as the young move away for work and social life.

Minor nitpick.

France is split into Paris, and everywhere else.

Everywhere else, as a rule, hates Les Parigots, they do not want to go and live in the capital, but accept that if you want a career, you will have to go there*, at least for the first few years.

* For example, the area in which I work (IT): half of all IT workers are concentrated around Paris. Almost zero chance of building a career while avoiding the place.

Another example is the public sector, where it is common for the young ones to accept a first posting in the Paris area, almost as a kind of hardship assignment, before (hopefully) a few years later getting a transfer back to their home town.

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This is just simply misleading.

Paris can probably account for most, if not all, of the price rises.

Anywhere else in France worth living has at best been stagnant for a few years, at worst had a 15-20% fall.

Areas populated by holiday homes have dropped even more.

I seriously wonder how much these so called experts really know.

Prices outside Paris are falling. EA's window prices are kite-flying exercises. I've been told that you should offer at least 20% off any price displayed. Even 25-30% off will be considered. The French don't do O/O or FP.

Most Brits will offer the price displayed - hence their reputation for being soft-touches ;)

The Bank Of France and the govt are worried because all the property pumping mesures they have put in place in the last 5yrs have failed. People are refusing to buy / can't buy at these levels. The old are now starting to realise that the FTB's just aren't there. The bubble , when it goes "pop", will be a spectacular mess. Much like the mid-90s...or worse (hopefully). B)

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Agentimmo....

This might be true where you live but it's not real France is it

Anywhere where holiday homes make up a large percentage of the housing stock is in for a big crash, stuff is simply not moving and hasn't been for years. Foreign buyers pumped up the market, lack of foreign buyers will crash it. These simple fundamentals won't change in the medium term.

Areas where real people live and work are not that bad, round by me the economy appears to be improving, companies are hiring and most people seem cautiously optimistic.

Housing market is still stagnant though and 20% off asking price is an expected starting point. I don't expect a further crash here.

Could be that I live close to Germany though ;)

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The Tour de France is coming through "our" village tomorrow. Will that put prices up?

I'm confused. In another thread today you're going on about having a three year tenancy and how you prefer it to renting, which is great. Except, I thought you were talking about renting the UK? Is your 3 year tenancy based in France?

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Agentimmo....

This might be true where you live but it's not real France is it

Anywhere where holiday homes make up a large percentage of the housing stock is in for a big crash, stuff is simply not moving and hasn't been for years. Foreign buyers pumped up the market, lack of foreign buyers will crash it. These simple fundamentals won't change in the medium term.

Areas where real people live and work are not that bad, round by me the economy appears to be improving, companies are hiring and most people seem cautiously optimistic.

Housing market is still stagnant though and 20% off asking price is an expected starting point. I don't expect a further crash here.

Could be that I live close to Germany though ;)

Of course it's real - unless I'm in a parallel universe of similar :D

Like other countries, the French "market" is made up of a multitude of smaller markets. You are close to Germany, therefore get some spill-over from the German "boom".

Go to the north of France, Calais and the like, and you'll find "cheap" housing that the locals cannot buy because they are on the dole.

On the Riviera, foreign buyers were the only show in town for years. They bought property as investments. Many are now trying to exit the market, but cannot. The locals will not pick up the slack as they earn the min. wage in many cases. Others, such as myself, refuse to play the game and are waiting for the crash. I've got quite a number of friends in this position.

Go to DordogneShire and if a Brit cannot sell to another Brit, the house just won't sell. No matter how many twigs they stick in a vase.

Housing market is still stagnant though and 20% off asking price is an expected starting point.

That's more or less what I said in my previous post. We agree that prices in EA's windows are usually 20% inflated. Except in the 20 Paris districts - where silly money still pours in. Once IR's start to rise, the crash in gay Paris will be spectacular, hopefully !

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Of course it's real - unless I'm in a parallel universe of similar :D

Like other countries, the French "market" is made up of a multitude of smaller markets. You are close to Germany, therefore get some spill-over from the German "boom".

Go to the north of France, Calais and the like, and you'll find "cheap" housing that the locals cannot buy because they are on the dole.

On the Riviera, foreign buyers were the only show in town for years. They bought property as investments. Many are now trying to exit the market, but cannot. The locals will not pick up the slack as they earn the min. wage in many cases. Others, such as myself, refuse to play the game and are waiting for the crash. I've got quite a number of friends in this position.

Go to DordogneShire and if a Brit cannot sell to another Brit, the house just won't sell. No matter how many twigs they stick in a vase.

That's more or less what I said in my previous post. We agree that prices in EA's windows are usually 20% inflated. Except in the 20 Paris districts - where silly money still pours in. Once IR's start to rise, the crash in gay Paris will be spectacular, hopefully !

The problem with the French is they are all poofs, they cant even win a war unless a Doris is telling them what to do

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The problem with the French is they are all poofs, they cant even win a war unless a Doris is telling them what to do

:D:D

They don't like Doris's much here. Edith Cresson (ex-Prime minister in the 90s) was enough for one century !!

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I'm confused. In another thread today you're going on about having a three year tenancy and how you prefer it to renting, which is great. Except, I thought you were talking about renting the UK? Is your 3 year tenancy based in France?

I rent a house in England on a one rear rolling tenancy, I was recommending two or three year to those who require longer term security. We are currently on holiday in France for a few months.

Next year, we are considering not having a long term rented base and we may rent for three month periods wherever we please, ie three months in south of France, three months in northern France, three months in Spain, three months in England.

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I rent a house in England on a one rear rolling tenancy, I was recommending two or three year to those who require longer term security. We are currently on holiday in France for a few months.

Next year, we are considering not having a long term rented base and we may rent for three month periods wherever we please, ie three months in south of France, three months in northern France, three months in Spain, three months in England.

Nice life!

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Indeed, but what the hell's causing it? How come mortgage finance is so loose in France? Haven't they ehard it's not a good idea? or is this some government/French central bank boost a` la the last days of Brown?

Peter.

Mortage lending is not loose in France. Rates are low and fixed for term at such low value. Would you think twice about buying a house 10 or 20k overpriced if you could fix for 25yrs at 4%? or would you wait a few years for the price to drop by 10 or 20k but end up buying with a 5 or 6% mortgage? Banks also lend based such that the maximum repayment is a proportion of your net take home. So basically you have a very different situation than here in the UK. Unless you loose your job (which is always a possibility everywhere you are) you know exactly how much your repayment is going to be for the rest of your term. It is easy to plan and a rate rise has no effect on you. It doesn't prevent prices from going up and down obviously.

Something else to consider: rents are significantly higher in France than UK (in equivalent towns). And of course there are all sorts of advantages to getting a mortgage for BTL especially if you are in the higher tax band.

So it is as rigged and unfair as in teh UK but without the fear of IR rises.

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Guest sillybear2

The Tour de France is coming through "our" village tomorrow. Will that put prices up?

Not if you trigger a crash ;)

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By jove, I think he's got it!

Maniac waving the knife he used to murder his victims exclaims "I killed him!"

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or is this some government/French central bank boost a` la the last days of Brown?

That's exactly it.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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