France house prices predicted to fall

The national association of real estate agents in France is predicting that the average house price in the country will fall by around 7-8 percent this year, and by as much as 15 percent by the end of 2009.

They are not the only ones predicting tough times ahead for the French property market – a number of studies in recent months have all pointed to decreasing property transactions and failing confidence in property investors.

It comes are no surprise that the property industry is starting to look a little shaky at the edges, with many firms laying off staff and having financial difficulties. According to recent research, the number of property transactions is already down 25 percent this year, and bankruptcies of French real estate firms has increased by over 25 percent during the first six months of this year alone.

With the construction sector accounting for around 6 percent of France’s economy, there are some worries about how the industry will affect the overall economy if property investor confidence does not start to grow again soon. However with the government looking set to buy up to 30,000 unfinished homes for which developers can’t find buyers, there is some optimism in the market and hopes that the housing market won’t fall any further.

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