Despite analysts' warnings of a coming slowdown, the housing market in France is surviving.

Notwithstanding a catastrophic financial situation throughout Europe, residential real estate in France is holding its own, despite recent announcements by numerous analysts and research companies. Ad hunters

Because of the unsolved Eurozone financial crisis, analysts predict a decline in housing prices and credit.

According to the National Institute for Statistical and Economic Studies (INSEE), property prices in France increased by 1.8 percent in 2011. This value has been modified to account for inflation. Despite the country's comparatively low borrowing rates, analysts believe that property values and rental income are not improving.

According to Credit Agricole, home prices in France could fall by 5% to 6% in 2012. It's possible that sales will drop by 8%.

According to Notaires - INSEE, apartment prices in Paris increased 14.8 percent year over year (12 percent in real terms) to €8,390 per square meter at the end of 2011.

 

According to the Global Property Guide, house prices in the Ile-de-France, where Paris is located, jumped 10.6% in 2011, to €5,550 per square meter.

House prices in the Petite Couronne (Little Ring) increased by 8.8% to €4,440 per square meter.

Average prices in the Grande Couronne (Large Ring) increased by 5% to €3,140 per square meter.

 

According to the National Association of Real Estate Agents in France (FNAIM), house prices in France grew rapidly from Q1 to Q3 2011, although the most recent quarter was sluggish.

In Q3 2011, the average price of all homes increased by 7.1 percent (4.8 percent in real terms) over the previous quarter, to €2,626 per square meter. In the last quarter, however, prices only increased by 1.04 percent.

After price increases of 4.2 percent and 2.4 percent in the previous two quarters, detached house (maisons) average prices declined 0.96 percent in Q3 2011 (0.91 percent in real terms).

Some parts of France are underdeveloped. In 2011, prices in Brittany declined by 4.6 percent.

Analysts' pessimism originates partly from Standard & Poor's (S&P) recently downgrading France to AA+ from AAA.

From 1975 until January 13, 2012, France had the coveted triple-A credit rating as Europe's second-largest economy. S&P also downgraded eight other Eurozone countries at the time.

According to some economists, the risk of a Eurozone recession is rising. They believe that the presidential elections this month and in May will make home purchasers more wary.

Despite this, France's economy increased by 1.7 percent in 2011, with a 2.2 percent increase in production. In 2011, household consumption increased by only 0.6 percent. France is anticipated to increase only 0.7 percent in 2012, according to some economists, due to stagnant purchasing power.

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