For Mr. Newman

France faces 40pc house price slump
France faces a property slump of Anglo-Saxon proportions as the frothiest boom in French history finally tips over, threatening the country with an economic shock just as austerity hits.

The advice in such markets is tp pretty much ignore the investment aspects of housing and focus upon the consumptions aspects.

Find somewhere you want to live for whatever, 15, 20 years, then work out if the price of living there, assuming no capital gains or even a loss, is acceptable to you for living there over those years.

Don\’t gear up, looking for a capital gain of course. But if that little manor house in a desirable village close to a decent airport is within budget then why the hell not?

Or even if that apartment in a decent arrondisement is…..

8 thoughts on “For Mr. Newman”

  1. So Much For Subtlety

    The question is whether 40 percent is enough. God, I hope not. Housing prices are grossly over priced all over the West and should come down by at least that.

    The other question is whether that would mean they are a bargain? The south of France? I doubt it. Paris? Again I doubt it. But somewhere nice in semi-rural France might be beginning to look like a good investment.

    People should remember that every purchase, even at a loss to one side, is a gain for at least one person. A good time to be cashed up.

  2. Agreed, I didn’t buy the pad in Phuket with the aim of making money, I bought it to live in when unemployed or on holiday (and for the wife, who is permanently both). Similarly I’m looking for a place in France where I can stay when skiing, not for renting or selling at a profit. When I buy a place I think ” is this worth this much to me at think price now?” not ” how much will this be worth to somebody else in five years”. Of course, if the price has gone up and I want to sel if for some reason then that’s good, but it’s not a factor I consider when parting with the cash. Still, it’s good to know prices in France are crashing, my CHF stash might get me something nice next year…

  3. To Tim Newman:
    AEP’s latest jeremiad leaves us outside the péréphérique baffled. Property price 2,000€ building cost 1,750€ doesn’t look like a bubble to us.

    (Of course you pay more for a view or a basement swimming pool, but TW would account that as Private Choice Theory. And of course land prices can go negative as we saw in London in 1993.)

    I bought a flat in a shack in Chamonix in 1988. Property prices promptly declined 20% and flatlined for a decade, but I had a lot of fun.

    My advice: buy the pad for cash and take out a mortgage for the ski pass.

  4. SMFS
    Prices “should” come down by 40%?
    By some moral force? Or have you got a bet on?

    It’s possible that governments will reward savers and screw borrowers, by raising interest rates. But given that governments are debtors, that’s not the way to bet.

  5. My advice: buy the pad for cash…

    I intend to. I have an aversion to mortgages, regardless of how much people tell me they’re a good idea.

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