I agree Camel. As a rule of thumb in Aix-en-Provence we recently used a yield of 3,8% to dertermine fair market value. At that level the property sold quickly but it still came out at 3500 euros/m2 - which isn't cheap....
I would say, as a buyer aim for a 5% gross return which would insure that you haven't overpaid the property. Taxes are high though on rental income. You will have no hope of financing your purchase with the rental income and the only thing that you can hope for would be a capital gain somewhere down the road.
Personally I would not invest at all until the current financial crisis works itself through. The currently falling prices could go much lower.
One thing that I will say about investing in the South is that high demand appears to ensure that you will always find a buyer. Not so say, in the Poitou-Charentes, where the current crisis is much deeper.

Neustria