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THE following is an extract from an interview on the current state of the French housing market given to Capital.fr, the French equivalent to The Economist, by the General Manager of Seloger.fr, Jean-Fabrice Mathieu.

He starts by saying that there has been a significant drop in transactions in a growing number of French cities. For Jean-Fabrice
Mathieu the tightening of credit conditions largely explains the slowdown in the market.

Asked if the summer marked the beginning of turning real estate,  Jean-Fabrice Mathieu said "Not really. According to our national index, prices were actually in a declining trend in August, but to a very limited extent, to -0.42%.

The market is rebalancing supply and demand. Sellers are adjusting their prices slightly under pressure from buyers who anticipate a decline for several months to come.

Nationally, prices have fallen by only 1% since the beginning of the year. Of course, the french property market is primarily local, and some cities have seen much more marked drops. "

When asked if he was expecting a crash in the coming months in French property, he replied, " Some elements are of concern, such as a drop of 15 to 20% in the number of transactions, but not enough to provide a real skid.

The main risk comes from the funding difficulties faced by buyers. Many households abandon their proposed purchase because of the sharp rise in interest rates and find it increasingly difficult to qualify for housing loans.

In short, there will not crash if banks are make an effort to regain new customers. For me this is more a financial crisis than a housing crisis: demand remains very strong."

Seller are interested in how this analysis impacts the sale of their property. Mr. Mathieu says that ads stay longer online.

"The average is now 90 days against 75 days last year.

It is a moderate increase, which makes me say that any decline in prices will certainly not beyond 20%. So, how are property developers and estate agents in France affected ?

Developers are acutely aware of the difficulties that current market conditions represent to them, but paradoxically, they have an even greater online advertising presence in an effort to boost house sales.

We will continue to monitor the number of estate agent bankruptcies in the coming months. Further closures are expected in sectors where prices are falling sharply. Despite these uncertainties, I remain confident."

We have seen the Pound fall further against the Euro as the government continues to raise concerns over the UK economy.

 We have seen a continue in the trend of poor housing data and many are calling for a cut in interest rates to try and kick start the economy. It is for this reason that we have seen the rate fall away even further as many experts have priced in the possibility of a further cut in interest rates as early as this Thursday.

 On a slightly brighter note we have this morning had the announcement from the government that they are gong to try and assist the housing market by making life a little easier for first time buyers. This coupled with the fact that interest rates may not change this week could see Sterling recover slightly towards the end of this week.

NEW figures released today by the Ministry for Ecology show a decine of 34% in the sale of new build properties in France.

This figure is more like 50% for the southwest of France, including the Dordogne and Lot-et-Garonne, according to an article in the Sudouest daily newspaper.

As of the 30th June 2008, the stock of new build homes that remain unsold reached 110,000, "a figure never seen before", commented the Ministry.

Those most affected are private investors. The French switched from investment in pensions to property during the booms years of the property market in France over the last decade.

A large proportion of owners try to rent their new build properties but occupancy is at only 30% year to date leaving them in a delicate financial situation.

A spokesman for the Union of Home Owners in the Lot-et-Garonne said "oversupply of housing now makes investment in rental property very risky".

The market research institute, Xerfi, are quick to reassure investors that a crash in the French property is avoidable. It says, "unlike the USA, UK and Spain, the financial situation in French households remains healthy because the French have not put themselves in debt to the same extent as others."

OUR recent article on road traffic conditions proved so popular that we thought people would find the official government site useful. Here you can find traffic reports and predicted contiditions for any day of the year in both English and French.

Although most people have returned from their holidays in France for 2008 you should add this one to your favourites for next year.

Bon retour!

AIRPORT workers are planning to strike on the bank holiday weekend and again on August 29th.

People travelling to Bergerac Dordogne airport from Stansted on Ryanair and Gatwiick to Bordeaux and Toulouse on easyjet or Bristish Airways will be affected by the strike action according to The Guardian.

So, if you're planning to view property in the Dordogne anytime soon then next week won't be the best time to fly. Ferry's are operating normally over the same period.