New forecasts for the French property market in 2009 and beyond

THE news isn't all that new.

FNAIM, the Federation of Estate Agents in France, restated their original estimates for 2009 by saying that the French housing market could expect to see a drop of up to 10% over the whole of 2009.

After a surprise increase in the number of house sales in April the figures for May show a small decrease of 0.2%.

The number of house sales will bounce around for a while before they stabilise. The same is said to be happening in the UK.

Overall, the French property market remains fragile. In the twelve months to May house prices are down by 6.7%.

FNAIM expect the year to finish down somewhere between 5 and 10 %.

Meanwhile, Christian Noyer, the Governor of the Banque de France, said earlier today in Hong Kong that the world economy could return to growth from the end of 2009.

"Some indicators point to a deceleration in the slowdown in the second quarter,"  said Noyer before a meeting of business leaders on a visit to China.

There was a caveat, however, in that he said forecasts were subject to the effect of the rise in unemployment and consumer confidence.

Last month, the ECB cut its base interest rate to a record low of 1%. It's expected to remain at that level throughout 2010.

Closer to home, in the Dordogne, business in the last two months has been more brisk. British buyers are taking advantage of the recent rally of the pound against the euro and lower house prices in the Dordogne.

Reports on the UK housing market indicate that prices are on the rise and there is some robust activity in the market, particularly in London.

It's true that housing markets are first into recession but they are also first out of it.

Other factors such as unemployment will dictate the gradient of the rise in property markets around the globe.

On that subject, new unemployment figures released today by the French Ministry for Employment show a sharp rise in the number of people out of work in the first quarter 2009. 

There were 106,800 jobs lost in the three months up to the 2008 year end and a further 187,800 workers have lost their jobs in the first three months of 2009.

The construction and manufacturing sectors are the most effected.