Hello Carole,

I just looked at the Immoprix - Bienvenue site, which is certainly interesting. But is it accurate?

I just spoke with the people who are negotiating an appartment sale for me in Aix-en-Provence, and I was told that prices there now are now dropping sharply.

Immoprix - Bienvenue however shows a price rise of 17.5% in this area from 2006-2007.

If their figures are correct (which is possible I suppose), then the reversal from 2007-2008 in the area has been very brutal indeed.

Neustria

Hi Neustria

Well, immoprix is a site with information compiled by notaires from property transactions, so one would hope it's correct.

We're coming across many differing view points from some of the expat websites, and there are a lot of people selling up in France and going back to where they came from.

There's a lot of talk about property prices dropping in some areas.
Interesting though, we're arranging a lot of equity release mortgages, and so far we have not had a property downvalued by a bank.

Strange times indeed ....

Carole
mortgagefrance.com

No reports of this in the UK property press

Hello Melanie,

Not everyone is aware at how biased the financial press can be. When it comes to property for example, price drops are accompanied by headlines which encourage you to buy at what are now "bargain prices". (It was on the market last year at 500.000, now you can pick it up for only 410.000!!!) Your local estate agent couldn't have put it better... And when the prices are rising you should also buy because if you don't you will 'miss the boat'! Either way, NOW is the time to buy. People of course buy these papers when they are thinking of investing so should the papers start telling us to hold off, then we will not only put our investment projects on hold, but we will also stop buying that specialty press.
Exactly the same phenomenon shows up in the press specialized in the equity markets. I have yet to see a headline which advises people to hold on to their cash, and wait until the storm passes. Instead they headline, "Here is our exclusive list of stocks which will do well in the economic downturn." What they forget to mention is that when the market as a whole drops, very few individual stocks will be able to resist. At best they might drop a bit less than the market, which the press will then describe as "outperformance" or "did better than the market average last year".
In a downturn, may the buyer beware... And he should also know when to distance himself from what he reads.

hi neustria;

Well i am currently looking to buy a studio in center of nice. From what i can see prices are holding up at about 3500-4500 E/sqm!

I have been told that provence and paris are always an exception, so i am really confused, is it a good time to buy or not?

it is slow, mainly in Nice, mainly because western economies throughout the world are worsening, meaning traditional investors are tentative about investing there

Personally, I would wait before investing because many knowledgeable people are expecting the global economic situation to get worse - much worse. Don't forget that real estate borrowing is at the heart of the current crisis.
As for choosing a time to jump in, I would keep in contact with the evolution of prices in the area that you are interested in. Visit places from time to time to see what is on offer, and you can follow the evolution of the prices per m2. I am guessing that volumes in Nice real estate are probably down, because sellers are so far unwilling to drop their prices, and buyers are unwilling to buy near the top of the market. Volumes should pick up as prices begin to fall.
Then, look at interest rates. An economic downturn will necessarily be accompanied by dropping interest rates. When interest rates start bottoming out, then real estate prices will certainly begin to rise. This will be the time to jump in but, this time could well be a couple of years off I'm afraid... You will certainly need to be patient.

I recently posted an article on our Blog that is essentially a translation of the key points from the French National Federation of Estate Agents (FNAIM) first quarter report for 2008.

The report paints a much rosier picture of the housing market than many agents at the coalface are witnessing. At a guess, it's the large cities llike Paris, Lyon, Marseilles and Bordeaux that skew the resale figures upwards. But in the smaller towns and countryside agents are reporting a 5% decrease in property prices.

In any case, FNAIM say that prices are down in France as a whole by around 4% in the first quarter this year (+3.3%) compared to the same period in 2007 (+7.2%).

As regards whether or not it's a good time to buy, apparantly it is.

The euro has doubled in value against the dollar since its launch in 2000.

Sterling is at an all time low. As long as the Bank of England is focussed on interest rates and not on inflation then analysts say that sterling's continued decline is assured.

France is aiming to bring inflation back to below 2% in the next year according to Christian Noyer of Banque de France.

__________________
Gerry O'NEILL
http://www.premierfrenchproperty.com
Mobile: +33 6 31 44 32 97 Office: +33 5 53 22 53 80

Re. "As regards whether or not it's a good time to buy, apparently it is.

The euro has doubled in value against the dollar since its launch in 2000.

Sterling is at an all time low. As long as the Bank of England is focussed on interest rates and not on inflation then analysts say that sterling's continued decline is assured.

France is aiming to bring inflation back to below 2% in the next year according to Christian Noyer of Banque de France."
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A good time to buy?????
Prices are dropping, but show no sign yet of bottoming out....
Sterling is weak... so you want to purchase in to falling market with a devalued currency? I don't get it.
France's inflation is running amok, as it is everywhere because of rising food and fuel prices. The official figures published by the government don't even begin to tell it like it is on the inflation front. The situation is serious and shows no sign of easing.
The new gouvernment under Nicholas Sarkozy is now weak and unpopular. His promises of change are no longer believed, and the country is depressed. Why should house prices rise when the newly elected gouvernment is disappointing the country, and where a global economic downturn will lead us God knows where? ?
Real estate in France has had a nice run from 2000-2005, so prices related to income are already very high, despite the few percentage points downturn. For the non-euro investor this rise is even more marked as that currency has gone through the roof.
I don't see this as being a healthy environment to invest, although the real estate agents will always be crowing at you to take advantage of the 'fire sale' prices...

It would appear that from conversations I have had in the Carcassonne area that the lease back deal is not so rosy at the moment. There appears to be a difficulty with rental returns and the sheer number of developments. We purchased our house south of Carcassonne in a small town, but outright and not leaseback. We have never looked back. We looked at a small development of 14 houses in 2007 that was to finish end of 2008. Just last weekend we passed the sites and although all the road and services are now in place, nothing has started. My advice to prospective buyers, is to check out local builders and inspect what they are building now. Thats what we did and it paid off, we could see how close the building was to completion and were assured it was what we wanted and at the price we could afford.
Dave