Property prices forecasted to be stable in 2010
Property prices fell across France in 2009 for the second year in a row and are expected to be stable for 2010, according to the latest figures from estate agents.
Overall real estate prices dropped 4.9% in 2009 even although they rose slightly at the end of the year, the figures from FNAIM, Frances real estate agency federation show. In 2008 they fell by 3.1%.
For 2010 the federation believes that the market will stabilise but it is slightly hesitant on making any predictions. It reckons there could be up to a 3% increase in prices in some areas and a fall of up to 3% in others.
The availability of cheaper loans and consumer confidence will determine how things pan out, according to FNAIM president Rene Pallinourt. He points out that many people are still worried about their jobs and although France appears to be recovering well from the economic crisis people are still a bit downbeat.
But he admitted 2009 was not as bad as the real estate industry had expected. Indeed a year ago the FNAIM was forecasting that property prices would fall by 10%, more than double the actual figure.
Estate agency chain Century 21 is also predicting only modest prices increases for 2010. It says prices could rise by between 1 and 3%. But it does expect activity to increase. In 2008 before the market started falling there were 700,000 transactions that dropped to 560,000 in 2008 and 550,000 in 2009. It says it expects around 600,000 this year.
Estate agents would like to see the French government do more to help the market recover. They are calling for cheaper loans and in particular for an extension to the zero rate loans for the less well off to help them buy property.
A new survey also shows that people are more confident about the real estate market. Some 60% think that 2010 will offer more opportunities than 2009.
Meanwhile, the report from the FNAIM also shows that more people are using estate agents in France. A decade ago just 45% of sales of older property went through estate agents whereas now that has grown to 60%.