French property prices to fall by 10% in 2009 says S&P

ACCORDING to new European housing market research carried out by the statistics agency Standard & Poor, French property prices will fall by a further 10% in 2009.

Compared to other European countries the drop in French house prices is considerably less but still surprising, say S&P, because of low household debt in France.

Between 1991 and 1997 the French housing market saw a drop of 40%, in line with some other European markets today.

Standard & Poor don't expect the French housing market to stay weak for a prolonged period unlike others, such as, Ireland, Spain and the United Kingdom.

In the year from October 2007 to October 2008 sales of new houses in France slumped by 44%.

Construction of new homes in France has dropped by over 20% with only 300,000 new properties planned in 2009. Demographic trends show a requirement for 500,000 new homes in 2009.

"The structural shortfall of supply in some areas will support prices, but its impact should not be felt before the end of 2010," says S & P.

Over the coming weeks there will be a plethora of forecasts on the French housing market for 2009, so stay tuned.