French property market..........

[Teamedup]

http://www.tiscali.fr/immobilier/actu.asp?ID=32138

[Will]

Perhaps somebody should tell the Bank of France that they are talking rubbish, it's nothing to do with interest rates or shortage of new housing at all, it's only the English who are to blame.

     (can't find a smiley with its tongue in its cheek)

[Teamedup]

But around here it is as they say. I suppose the Ile de France is exactly the same too, let's face it most of the time the govt can't see past the Ile de France.

[Jonzjob]

"      (can't find a smiley with its tongue in its cheek)"

Well William you're an 'Admin type' so make one! Pas des problem?

John.

[Woody]

could someone tell me what the article is about.it is written in french and im still learning the language.thankyou

[Dick Smith]

Bad translation (corrections invited):

PARIS (Reuters) - the Bank of France estimates that a continuation of the rise of property prices with the current rate/rhythm could present an "important risk" of the creation of a speculative bubble in the years to come. At the moment several factors tend to draw the theory that a "property bubble" has already formed, says its economist, Gilles Moëc, in a study entitled "Has a real bubble formed in France?" and published in the monthly bulletin of the Bank of France issued on Tuesday. Among these factors, he quotes the existence of a strong demand against weak stocks of new residences, so the number of sales in 2003 was twice that of 1990-1991, at the height of the last speculative bubble, thanks in particular to the fall in interest rates.

"Several factors allow us to understand the current price rises and may not lead to the existence of a bubble already forming", he writes. (???)

But the Bank of France notes that, since the peak reached in 1998 and 1999, the purchasing power of households has fallen, the price rises no longer being compensated by the fall of interest rates nor by the improvement of the incomes. Only lengthening the duration of the loans still supports demand.

"As an example, if the rise of the prices were maintained for two years at its current rate and if the interest rates in the long run increased by three points (...), the ability to purchase of homes of the French would fall down on levels close to those which prevailed in 1991", it explains. The years 1900-1991 saw the worst real bubble followed by seven years of the market in crisis. Moreover, the degree of indebtedness of French households has reached today a historically high level and the share of personal contribution at the time of house purchase is reduced. "That is why the changes to come will have to be followed with particular vigilance", the Bank of France study concludes.

[Quillan]

I actually read this some time back. Our doctor, for some strange reason, has only finance magazines in his waiting room (the name of the magazine I can’t remember) which said the same thing. It also had lots of charts with price comparisons (in cost per square metre) for all over the country and over the last 5 years.

 

Perhaps he puts them there to depress you before you go in and anything he tells you will sound good after reading the magazines.

[Hegs]

It's affecting many countries, Australia, the UK, Ireland, the US and the Netherlands are particularly bad, certainly worse than France. Things will get bad when reality finally prevails!

The Economist has been doing some detailed surveys over the last couple of years, here was the last update: http://www.economist.com/finance/displayStory.cfm?story_id=2736477