|
Archived Articles
Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.
He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.
In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.
Global Real Estate Project
|
 |
France: Market is slowing down
The French National Real Estate Federation (FNAIM) has just published its last quarter market snapshot, showing a continuing trend of market deceleration. On year-to-year basis the prices of old properties has gone up by 8.3%. This is almost a half of the pace reached during 2004. The data is taken from 513 urban centers throughout the country. The self-evident conclusion that comes with this snapshot is that the market is slowing down, but what are the reasons for this? Can we point at only one explanation, or there is combination of several factors jointly contributing to these disappointing figures? The main reason for the recent real estate market deceleration in France is the general feeling that the exceptionally high investment returns are a matter of past. This feeling is translated into lesser interest in buying residences for investment purposes only. To be perfectly honest the interest still persists but the mood isn't so optimistic, and thus the demand isn't very high, especially when compared with the boom of 2003-2004. Yet even this less optimistic mood wouldn't affect the market if there weren't some alternative investment options available, options that weren't available some 2-3 years ago. First and foremost, such alternative option is the shock exchange that was almost deserted as viable alternative for many years since 2000-2001. Now it's again up and running. Another alternative investment option is the rising returns on some prime governmental obligations, particularly from North America and Western Europe. The time when the central banks tried to ensure 'soft landing' for their economies by bringing down the interest rates are over. The treat of higher than normal inflation seems to be again their prime preoccupations. The rising interests affect the real estate market in several ways. They make the housing affordability more difficult to achieve, and thus put an additional pressure on the sellers to sell faster. They make the buyers less inclined to buy at the current price levels given the higher mortgage costs. They make those who plan to buy for investment purposes only to look favorably to some alternative options. If the changing investors' feelings are the main reason why the real estate market in France is cooling down, then the rising main interests is the key explanation for their concerns. The future looks like the European Central Bank (ECB) will keep on its current road of gradually tightening the credits. Unsound French financial policy is one of the reasons for this, the other main reason being the German unsound financial policy. Both countries spend more than they should leaving ECB with no other choice than to tighten the credit. At the end this more restrictive policy goes back like a boomerang to France and Germany as higher interests, slower demand, and market slowdown.
France, property appreciation on year-to-year basis --------------------
See also the directory of companies providing real estate services in, and general real estate information of France.
|
See also:
