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Is France set for a 40pc fall in prices?

Friday, May 11, 2012

French property is facing a slump "of Anglo-Saxon proportions", according to some experts, as the country's property boom threatens the market with a fall in prices of up to 40 per cent.

Speaking to The Telegraph, PrimeView predicted that the factors fuelling the booming French property market would soon disappear, leaving prices to drop after their staggering 160 per cent surge since 1998.

Indeed, Paris is now the third most expensive city in the world for real estate, according to Knight Frank, above New York with the value per square metre leaping to £14,600. But Standard & Poor have echoed PrimeView's concerns, suggesting that prices will soon correct themselves by 15 per cent as part of a slide that could last for four years.

"A number of clients tell me they think the market has topped and want to get out," one French hedge fund manager told the newspaper.

PrimeView predicts the fallout to be far more severe, as the increase in house prices outstrips the growth in household incomes, the number of sellers increases due to an ageing population, and taxes are set to change after France's elections.

 

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