Is the French property market on the slide?

After many years of good growth, it seems as though the oomph may have gone out of the French property market. Reports from the UK’s RICS (Royal Institution of Chartered Surveyors) and the FNAIM (the French estate agents’ federation) would seem to show that as far as French bricks and mortar are concerned, the va-va-voom has vamoosed.

The RICS report states that in 2007, average prices across France only rose by a modest 4 per cent, with the market hitting a seriously slow patch in the summer. It suggests that contributing factors might be ‘a slowing economy, rising interest rates, greater credit constraints and weakening consumer confidence.’

Some 40 per cent of French residents are tenants rather than home-owners. Given the fact that the cost of purchasing property has risen in comparison to the cost of renting, it seems unlikely that France will become a nation of home-owners any time soon, despite the avowed intention of President Nicolas Sarkozy to facilitate this process via tax breaks aimed at buy-to-let investors.

Meanwhile, latest French property price figures from FNAIM show that in the period December 2007-February 2008, average prices were stable, with the overall growth figure year-on-year for the market now sitting at a humble 3 per cent.