Steep Decline In Real Estate Prices In France
News Posted On: 05 January 2013
If you look at the real estate prices in Paris or Nice, you will see that the these areas are still skyrocketing. While this may paint a positive picture of France's real estate, experts have a completely different opinion about this situation. They say that because of the high prices in Paris, Marseille and other important destinations, people are failing to look at the overall picture of France. These cities and centers are masking what is a really steep fall in the real estate prices in other parts of France.
Overall Performance Matters
A single or a couple of cities do not paint the overall real estate situation of a country. According to real estate experts, the overall market in the country has to be taken in account. When you look at France from that point of view, the situation looks really bad. Other than the major cities in France, none of the other cities and towns are doing well in terms of real estate. The only consolation is that these cities have been able to mask the bad situation in France. But experts believe that this trend cannot continue for long and sooner or later, the bigger picture in France will come to the fore.
Rural Areas Hit Hardest
According to reports by notaries, the rural areas in France have been hit the hardest by this price decline. Official records show that the decline in prices has been more than 3% in the last 4 years, a significant number if you extrapolate the results over the next 10 years. This is only the countrywide figure, which also includes cities like Paris. If you take only the rural areas, the number of areas with double digit percentage drop in real estate prices is a very long one. Areas like Limousin and Poitou Charente have registered declines of more than 15%.
Sales Volume Also Suffering
In the ideal scenario, a drop in real estate prices should indicate an increase in the sales volume. Investors will be looking to make hay while the sun shines and buy as much property as possible. But notary records show that the sales volume has also gone down by as much as 20%. This is a clear indication that the state of French economy is also very bad. With this trend, you might have to be wary of a further fall in property prices in France.
Euro Zone Crisis and Change in Government and Fiscal Policies
According to leading realtors and real estate experts, this situation has risen due to a combination of factors. The crisis in the Euro zone is obviously the most significant factor. Over that, the Government of France has made a few questionable fiscal and economic policy changes. These changes have made the French market a very hard place to enter and survive. Investors prefer markets with easy policies that are light on their pockets. Unless the government decides to make some changes, this situation is not likely to change in the near future.
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Written by Les Calvert
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