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Brits sell as France prices drop - 2 July 2008

Property experts in France are predicting that prices are likely to fall by up to three per cent over the course of 2008 – and many people are citing British owners selling up for a profit as one of the causes of the slump.

While there is no doubt that global economic conditions are not helping housing markets in Europe’s developed markets, it is the highly-favourable exchange rate of the Euro that is leading to British sellers accepting prices below the potential market value of their property in order to cash in now.

While the news is good for buyers currently looking for a property on the other side of La Manche, estate agents are fearful of this rapid reversal of a market that was weathering the storms in real estate felt further south in Europe surprisingly well. The sellers who currently have property on the market are being tempted with offers that are 20 to 30 per cent below their asking price as they feel they will make up the deficit in the strong Euro/Sterling exchange rate.

Estate agents in the country are seeing that in real terms, prices in France seem to have been static for the past couple of years, and are now beginning to drop as deals are being done to take advantage of the exchange rate.

While sellers are making sure they get the most out of what they see as the beginnings of a falling market, the combination of credit pressures and the currency rate are giving buyers an ideal arsenal to go out and make offers significantly below the asking price for properties that they may have thought were previously beyond their reach.

Predictions for the immediate future of house prices in France vary, with some watchers suggesting that the market is stable, and others predicting the beginning of the same kind of slowdown that has been seen elsewhere in Europe. If anything, France is in a better position to weather a market storm than many other countries as it has resisted the temptation to build on the same huge scale that has left other countries with thousands of empty properties and developments that are stuck semi-completed.

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