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France property outlook mixed

While France has been a leader in the second home and investor property markets, there are signs that this stronghold is falling, though slightly. Reports show that inflation in France increased as did property prices, though not as high as expected on the later.

Property prices rose by 3.8 per cent through December of 2007. This is the lowest increase since 1998. Investors believe that this is the first sign that the housing market in France is beginning to waver.

According to the Federation Nationale des Agents Immobiliers et Mandataires or FNAIM, the reason behind the slow down stems from the decrease in purchasing power here. Additionally, most economists agree that interest rates here are at favourable levels.

Also consider inflation in France. It is currently growing fast, faster than it has since May of 2004, in fact. The main push behind this increase is the cost of energy which is also rising considerably. Consumer prices rose to 2.8 per cent which is 0.2 per cent above the previous month of November.

This rise was seen by ECB President Jean Claude Trichet, who in turn is looking to policy makers for some changes. The European Central Bank has a ceiling of just under 2 per cent. The goal with any policy change will be to slow inflation down, so that drastic increases are never seen. Accordingly, the ECB did keep its benchmark rate set rather than changing it in a recent meeting.

Still, with this information comes the latest list of potential hotspots for overseas investors to dabble in. British buyers still love Languedoc which will continue to see value rises throughout the year. Additionally, Cote d'Azur is looking favourable for those that with to purchase and hold property. Var is an ideal choice for a weekend getaway because of its location so close to Nice's airport.