What's the French housing market up to today?

SO, what's the french property market really up to at the moment? There are conflicting reports from various different sources.

We reported last week that one of the largest nationwide network of French estate agents predicted a 10-15% drop in prices in 2008.

Today, in accordance with FNAIM, the French federation of estate agents, ERA, who have several thousand agencies across France, maintain that we are at the end of a cycle.

According to one of the company's executive directors, Jean Lavaupot, in a recent statement "We are currently in a situation of deja vu. We've already seen previous corrections in the early 80s and 90s. At each end of the cycle, the break in the momentum of rising demand leads to price stabilisation. The market has stabilized but is not decreasing! "

In other words, according to the branch network, everything is under control.

In fact, Mr. Lavaupot sees the current situation in the French housing market as a blessing. He says "the upward trend in the past decade has created some bad habits among professionals which has given way to service deficiencies and generated frustration among buyers and sellers alike."

He predicts that there will be considrable fallout and many more agencies will close over the course of the year.

However, ERA make no mention of the possible effects of the global economic situation on the French housing market.

All indicators contradict their predictions with exports down considerably in May on the same period last year due to a strong euro.

There would seem to be two different schools of thought among real estate professionals in France.

On the one hand there are those who remain convinced that prices have stabilised and will not decrease below the predicted 4% for this year.

On the other are those who say that property prices are on course for a 10 - 15% drop this year.

UK inflation is now at 3.8% with some predicting it will rise to around 6% by the end of this year.

Could the news over the past few days of the renewed turmoil in the US financial sector with government rescue packages for Freddie Mac and Fannie Mae be the straw that breaks the camels back or is there more to come?

With precious little good news in global markets as the year progresses, it seems more improbable that the French property market will exit 2008 unscathed.