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French property prices 'on track'

30th November 2005 | back to article listings BACK    print this article PRINT

A new report looking into the property prices of countries around the world has suggested that investing in a French property could provide real value for money.

A report from the Paris-based Organisation for Economic Co-operation and Development (OECD) has suggested that there is not any threat of a worldwide price crash as property inflation starts to slow, largely because asking prices are not out of proportion with buyers' expectations. It had been feared that an overpriced market would facilitate a crash in prices and a loss of confidence among investors as sellers placed unrealistic prices on their properties.

But the good news from the OECD is that in most cases that has not happened and for those looking to buy a property in France, there was even better news.

While some markets, such as the Irish property sector as well as the UK's, are somewhat overblown at the moment, this trend is slowly changing. But the French market was one of those singled out by the OECD as its prices accurately reflect the value of properties, meaning that while prices are relatively high, they are not overvalued and as such investors should not be put off from the French market.

French prices, the OECD explained, are currently in line with the "fundamental" price, which refers to the supply and demand of housing in a country. This means that prices are unlikely to suffer without a major shift in one of these two areas. That puts France in a better position than many of its European neighbours, where property prices have not yet come into line with the supply and demand ratios.

The prospect of a crash in French property prices is made more unlikely by the OECD's report, because it recognises that prices have remained in step with the French economy and with what people expect to pay for properties. As such, investors looking for a safe investment are increasingly looking to the French market, because it is now seen as one of the safer areas in Europe to invest, with prices anticipated to hold firm and eventually begin to rise once again, rather than suffering a prolonged period in the doldrums.

Provided France is able to maintain relatively low interest rates, the country's property market looks set to remain stable and grow in the years to come, meaning that property investors are increasingly looking to the country as a major source for revenue in the future.

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