Concern Over Possible French Property Slump

There have been suggestions that France could be on the brink of a property market slump. Pierre Sabatier from the consultancy group PrimeView has stated that he expects prices to drop by 40% within the next 10 years.

France has an ageing population which will significantly contribute to the decline in French property, as more people are selling their homes rather than buying. Mr Sabatier predicts that the number of sellers will increase by roughly 1.2 million every 5 years for the next 20 to 30 years. Meanwhile the number of buyers will stay fairly constant.

“Ageing means the end of property’s golden age. It may be less rapid than in the US because French households have less solvency problems, but we think a 40% fall may be inevitable over five to ten years.”

Other industry specialists are not as convinced about this bleak prediction. Graham Downie, founder of Cognac Property Services, suggested more overseas property investment could help boost the market. “Underlying demand remains strong from French nationals and with 50 million plus visitors every year, it remains the most popular tourist destination in the world.“ 

Mr Downie believes that prices will level off this year but multiple micro markets throughout the country will go through different experiences. Some regions may face falling prices while others will have small increases.

With the recent election of Francois Hollande as the new French President, many people concerned with the property sector, including overseas property insurance providers, are waiting to see how his economic policies will impact the market.