(Easybourse.com) For nearly ten years, prices in the property sector french experienced a continuous rise until almost doubled over the period. But the crisis subprimes went through there, and prices in 1st half remained exceptionally at the balance…
According to the chairman of the National Federation of Real Estate (Fnaim), Rene Pallincourt, "there is no crisis in real estate, but a financial crisis with collateral damage on the property, thereby hers on the merits, recent comments by the Minister of Housing, Christine Boutin.
More encouraging its counterparts already anticipate that, like real estate agencies Laforêt, a fall in prices of about 15% over two years, Fnaim does not "risk of sharp decrease in prices" but a lasting stabilization of these .
Thus, admits René Pallincourt, french real estate sector which has enjoyed a decade of uninterrupted growth in prices (mainly the former) seems well and truly "end-of-cycle".
For his part, Minister of Economy, Christine Lagarde, said that "if prices fall, it is rather healthy."
If the conclusions differ somewhat between industry experts, however, they agree on mechanisms explaining such a slowdown, which started from the second half of 2007. Until this period, the cost of credit was low because of an interest rate level itself down, and duration of credit s'allongeait without difficulty.
These two factors allowed to offset the sustained increase in property prices. But with rising interest rates (nearly one percentage point a year), the credit market is clearly become more difficult to access for many customers. The result, according to the chairman of the Fnaim, "households are tempted to speculate the decline and postpone their housing project."
Buyers are scarce
Indeed, sales in real estate have dropped sharply, the volume of transactions falling even 10% in 1st half over the same period a year earlier. According to the Fnaim, prices stagnated throughout french: +2.4% in the South-West, +0.6% in the Centre and the Alps, and +1.9% on the Island - de-France.
And in some cities, prices have even declined, including Rennes (-2.3%), Marseille (-1.5%), or Grenoble (-1.3%).
As for those who resist, they are not: Lyon (+5.3%), Bordeaux (+2.4%) and Strasbourg (+4.1%).
Published on 09 July 2008 / easybourse.com