French house prices falling faster than expected

SOME of the highlights from an article in The Connexion newspaper today indicate that house prices in the Dordogne are dropping faster than the INSEE or French government would have us believe.

The President of the FNAIM in the Dordogne says that asking prices are coming down by, he speculates, as much as 20%.

But is that just vendors getting more realistic about what a lot of people believe are already over-inflated prices ?

According to an economist in Paris, 2008 is likely to be the first year of recession in France. It's not clear from the article whether he means to say that 2008 will be the first of a number of years of recession in the French housing market.

Again, new builds seem to be taking the brunt with sales of new homes down by 28% in the first quarter.

There were only 110,000 new build sold across France this year as opposed to 130,000 for the same period last year.

This is partly due to oversupply. Construction companies have almost halted new projects as the number of mortgages granted are down by 20%.

Developers Kaufman and Broad have reported a 71% drop in profits in the first six months of this year.

So, where are we headed with house prices in France for the coming year?

Opinions from several professional sources vary wildly from a drop of five to six percent to prices remaining stable. Apparantly, we can expect some very wide variations between the major cities and smaller towns.