FNAIM reports a stable French market

The French estate agency federation, FNAIM, predicts a stable year for property prices in France in 2008, with average rises likely to be no greater than the rate of inflation – currently around 1.6%.

Their forecast follows a period in which the prices of resale property grew in France in 2007 by a modest 3.8%. This compares with rises of 7.1% in 2006 and 10.4% in 2005.

It concludes overall that there will be a soft landing for the housing market rather than a drop, but there will be rises in some areas and falls in others.

There are a number of factors that could affect the market adversely and these should 'not be under estimated'. They include the mood of households in France faced with rising fuel and food prices, a sluggish economy and continuing concern over spending power.

The federation's report also mentions the global credit crunch sparked by the so-called sub-prime loan crisis in the United States, and concern over possible rises in mortgage interest rates in France – though the Central European Bank seems unlikely to change its rates for a while.

The south east of France did well with prices rising by 7% over the year – fractionally up on its 2006 performance. In the north and east prices rose by 4.9% (against 9.4% in 2006), in the west they rose by 2.4%, in the centre and the Alps they went up by 3.1% and in the south west prices rose by 3.8%.

Elsewhere prices rose by 6.1% in Languedoc-Roussillon and by 4.6% in the Limousin, and by 2.7% in Poitou-Charentes and just 1.5% in the Pays de la Loire. The average rise in Aquitaine was an even more modest 1.1% whereas prices rose by 6.6% in Burgundy and 7.3% in Brittany, by 4.1% in the Central region and 3.8% in Haute-Normandie.

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