Categorized | International

French Property Market Will Struggle in 2012

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In what is not exactly welcome news for the global real estate market, one of France’s biggest banks has predicted that the nation’s housing market will experience a sizeable decline in the next year. The bank, Credit Agricole, believes that sales will drop nearly ten percent, and prices could fall by as much as six percent in 2012.

The current residential real estate market has had mixed results thus far this year. Prime real estate properties in both Paris, and also the Southern parts of France have performed exceedingly well. However, other areas of the country have seen their real estate markets remain stagnant, or even falter a bit. As a whole, the number of residential real estate transactions is expected to be near its lowest level ever in 2011, and will likely be worse in 2012.

With that said, the looming European debt crisis has already started to negatively affect the country. It will likely grow worse in 2012, and thus, the real estate market, even in the prime areas such as Paris, is expected to experience a decrease in performance.

Real estate analysts believe that one of the biggest factors in the overall health of the residential real estate market in France will be that of pricing. If pricing on properties is adjusted to an affordable level, it is likely that there will not be such a massive drop in the volume of sales. If prices are not adjusted to realistic levels, sales could essentially come to an overall halt, thus grossly hurting the very fragile property market.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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