Monday, March 28, 2011

What’s France’s secret for rising house prices?

House prices: Ireland slumps; France booms

House prices in France were up 10% in 2010, according to Knight Frank's latest round-up which is out today. They say it's because the French were more cautious on mortgage lending - but can they really account for such a big swing. Could there be something in their reluctance to trim public sector spending - or am I missing something else?

Posted by tom d @ 01:42 PM (2298 views)
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6 thoughts on “What’s France’s secret for rising house prices?

  • It’s a very strange list. Prices in Latvia are up 16.9% – how is that possible, given what’s been happening to their economy? They have unemployment of 18%, second only to Spain in the EU. They’ve had massive spending cuts, bailouts from the EU, etc. In theory they should be in the same boat as Ireland. And yet??!

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  • 1. drewster

    Come on, pile in!

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  • ontheotherhand says:

    Suprised they didn’t pick this quote up from the Knight Frank press release,

    “In Europe and the US, by contrast, the last vestige of the stimulus, namely ultra-low interest rates are regarded as critical to the ongoing security of the market. As an example, discussions surrounding an impending rise in the UK rate from 0.5% to 0.75% are enough to cause panic among housing market commentators.”

    Panic. Lovely word. Now where’s that lifecycle of a bubble chart showing a suckers rally followed by ‘fear’.

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  • As I’ve said many times before you really are in the sh1t if a rise in rates from a historic 300 year low is going to tip things over the edge

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  • “or am I missing something else?”

    Prices didn’t bubble in rampant HPI as they did in Spain and the UK. In fact they had fallen a little in the last two years.

    French banks are also more strict on lending criteria, requiring such things as proof you can afford the repayments. Many mortgages are fixed rate for the entirity of the loan too.

    Do not expect the same increase next year though.

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  • 4. vinrouge said…’Many mortgages are fixed rate for the entirity of the loan too.’

    Now that’s something french I like.

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