Skip to comments.S&P sees deeper house price falls in eurozone as slump engulfs core
Posted on 01/21/2013 4:21:40 AM PST by MeneMeneTekelUpharsin
Downturns in the Dutch and French housing markets appear to be accelerating. We forecast nominal price declines of nearly 6pc and 5pc respectively this year as rising unemployment, decelerating wages, and the prospect of austerity measures frightens off buyers, said Jean-Michel Six, the agencys chief Europe economist. Frances house market has been a bastion of stability through most of the global crisis but prices began to slip last year as President François Hollande embarks on a draconian fiscal squeeze to meet EU deficit targets, mostly by raising taxes. Home sales collapsed by 24pc in September from a year ago, the usual precursor of price capitulation by sellers.
Mr. Six said the affordability ratio in France is still roughly 30pc above historic averages and credit is tightening. He expects French prices to fall a further 5pc in 2014, bringing the peak-to-trough decline to 11pc. This is a gentler denouement than the 40pc crash predicted by French consultancy PrimeView, which describes the French market as a gigantic bubble vulnerable to a witches brew of demographic effects, tight credit and a loss of tax relief. It said prices had risen 160pc since 1998 at a time when household incomes had gained just 35pc.
PrimeView said aging will have a profound deflationary effect on the French market for the next quarter century. The pool of buyers will stay constant at 33m, while number of the sellers will rise at an average rate of almost 250,000 each year.
(Excerpt) Read more at telegraph.co.uk ...
We have a 15 year housing 'overhang'. France's problem is less than that, but they suffered from a history of high housing prices running back to 1939.
At the moment prices in Brittany are pretty good ~ you can swap out your 5 bedroom mini mansion West of Oklahoma City for a 5 bedroom 700 year old mini chateau (with moat) for pretty much the same money ~ but you'll have to pay the sewer and water hook up fee in France ~ that happens every time a house changes hands!
Next, prospects of Bretagne Independence and what that'll do to your mini chateaux.
The housing recovery is underway. ZIRP is working at least to clear some of the wreckage and they’ve a publicly stated policy of holding ZIR through 2014. You’re betting against all that?
Considering that the true unemployment number is well over 12% and will be for quite a while, yea, I’m betting against that.
I have found that almost all real estate agents can not accurately present what is going on. Of all professions I have encountered, they are second to no one in continual deceit.
Asking a real estate agent if it’s a good time to buy is like asking a dog if it’s a good time to give him a steak. Of course it is. No matter what.