PDFinvest.com

The announcement that the French economy grew by 0.14% in the third quarter of 2008 has baffled the pundits and delighted the government. While Germany, Italy, Britain and the United States have moved clearly into recession, France has managed to grow its economy, albeit by a small amount.

With a huge smile on her face, Christine Lagarde told F2 TV viewers that the figures would not be as bad as predicted. The key to this relative success would appear to be the French government's determined measures to encourage spending by France’s thrifty consumers.

While the level of British savings, at zero per cent, are the lowest they have ever been since figures were first collected, the French have continued with their traditional tendency to make sure that there is always a cushion between them and financial disaster. The average French savings rate is more than 10% of Gross Domestic Product. While in recent years the rest of the world spent its savings with consequent growth, French consumers kept their money in the bank.

Compared with Germany, France also has the new-found advantage of not being the biggest exporter in the world. At the moment, it is exports which are suffering worldwide more than internal consumption.

It remains to be seen whether this good quarterly figure has merely postponed the recession for six months or whether the governments pro-active measures will defy the international trend
altogether. International forecasts are not encouraging but then a panel of 24 economists predicted that France would fall into recession this quarter and they were wrong.

FRENCH ARE LESS PESSIMISTIC!

Tuesday, 02 December 2008
According to the monthly opinion poll BVA the economic confidence index among French people has increased for the second month running. Last month it was up 12 points.

This month it has increased by a further 4 points. The pollsters stress that this does not mean that the French are victims to the old Rudyard Kipling joke “if you can keep your head when all about you are losing theirs – you don’t know what is going on”. The overall outlook is pessimistic and one employee in two expects redundancies in the coming months. The French are however a lot less pessimistic than in previous months.

It may be that the relatively high level of savings held by French households and their very low level of investment in the stock market are related to the present improvement in sentiment. French private savings are 14% of gross domestic product, according to the European Central Bank - seven times higher than in Britain and the United States.

SATURDAY, 29 NOVEMBER 2008

The French government is preparing an economic support plan to rescue the country's Real Estate industry from crisis.

President Nicolas Sarkozy said he planned to introduce interest-free loans to finance energy-saving improvements to homes and that the government would buy up to 30,000 new homes to support the construction industry.

Sarkozy said that the government would also raise the threshold of income that would allow home-buyers to qualify for state guarantees for their mortgages. The aim is to have 60% of people taking out mortgages eligible for the guarantees compared with 30% currently. 'This will avoid excluding households with modest income from the property ladder,' he said.

However, Sarkozy warned that house prices must become 'attractive' for the Real Estate market to recover and that a situation where property prices have soared well above pay levels is unsustainable. 'A sector in which prices have doubled in 10 years is a sector that was preparing a crisis for itself,' Sarkozy said. 'When there's a total disconnection between the evolution of buyers' revenues and property prices, we were preparing for ourselves a latent crisis,' he added.

Part of the plan means that from 2009 France will offer homeowners zero-interest loans of up to €30,000, a measure that will help the construction sector, while boosting energy efficiency.

The part of the rescue package to buy up to 30,000 new homes is aimed at the construction sector to keep people at work. Sarkozy said it not intended to sustain high real-estate prices in France and he stressed that the government would only buy at reasonable prices.

The president also said that he supports broader home ownership in France. The full details of the rescue package will be announced on December 4.

Overseas property buyers continue to outstrip supply

26.11.2008 11:58:23 It has been revealed that the overseas property hotspots in Southern France are seeing demand from overseas property buyers continue to outstrip supply.

(live-PR.com) - The French National Estate Agents Federation (FNEAF) reports that French property prices overall rose by 7.1% in 2006, 3.8% in 2007 and 1.7% in the 12 months up to July 2008 – making it one of the few places in the world that has seen continual price rises throughout the credit-crunch.

Liam Bailey, chief market analyst for upcoming property portal Property Abroad had this to say of the revelation:
“France has seen such continued – if steady – increases in property values, mainly because it never really became swept up in the overseas investment boom. In the last 2-3 years thousands of savvy people with a pound to spare decided to put their money into overseas property, but did so, mainly in off-plan properties in emerging markets where prices were incredibly low, and the opportunity presented itself for immediate high-level gains and incredible rental yields. France never exactly offered an abundance of these properties, and so has and will remain to be one of the favorite places for people [especially Brits] buying a resale property as a holiday home.”

The locations noted as being continually successful in terms of overseas purchasers by the FNEAF were, particularly Cannes joined by its Southern France neighbors: Cap Ferrat, Mougins and St Tropez.

Property Abroad have some excellent properties in Southern France, including fantastic one and two bedroom apartments in central Cannes, just a short walk from the area’s best known Palm Beach. The apartments, over five floors start at just (euro) 282,000 and have terraces overlooking the beach.

By: Mark Russell

There are three good reasons (Particularly if your base currency is £ sterling) why, if you are considering buying property in France, you should act now.

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France may never be better value than it is now. Prices are steady at present but liable to go sharply higher as spring approaches due to borrowing in France being cheaper than ever for French tax payers because of new MIRAS-style tax breaks taking effect, as well as inheritance tax changes, which have freed up the market. Now is definitely the time to snap up an investment!

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Potential changes to the French inheritance tax system are set to provide a boon to British investors looking to purchase property in the country, according to estate agent Unique Living.

As part of a package of reforms proposed by new president Nicolas Sarkozy, the inheritance tax threshold in France will be trebled.

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