French property boom set to stall

By Ben Hall
Published: Jul 03, 2008

The decade-long boom in France's housing market is set to end this year with a slew of surveys pointing to sharply declining sales and possibly a small fall in property prices, writes Ben Hall in Paris .

Average values declined by 0.8 per cent in the first three months of 2008, according to the National Notaries Index published on Tuesday. It also recorded a sharp quarterly fall - the biggest in 10 years - in the number of sales in the Paris region, down by 7.9 per cent on the same period in 2007.

HSBC is predicting a 4 per cent average decline in prices this year and a 6 per cent fall in 2009. But there are big regional variations, with a 6.4 per cent decline in property prices in the Loire region over the last year and a 5.9 per cent rise in Lorraine, in north-eastern France, according to the estate agents Century 21.

France has witnessed a surge in property prices on a par with neighbouring countries, with average prices doubling between 2000 and 2007, according to FNAIM, the national housing federation. A buoyant construction sector has also been an important factor behind the drop in French unemployment.