The sub-prime meltdown has, in effect, had little direct impact on the French housing market.  A few banks such as Dexia, Natixis and the Credit Agricole have suffered from exposure to highly leveraged products generated in the United States but the biggest French banks such as SocGen and BNP Paribas have not suffered inordinately.

Nonetheless the knock-on effects of the credit squeeze are now having a negative effect on the availability of credit for such products as bridging loans.  Real Estate agents report that sellers are still trying to get the same prices as they did nine months ago and that buyers are having to prove much more credit-worthy than in 2007 before they can find a loan.  Niche markets such as those in the Dordogne, where many of the sales are restricted to British people buying and selling among each other are being badly affected by the plunge in UK house prices.

 

 
 

In 2007 it seemed that the subprime meltdown in the United States would have little impact on the housing market in France.  Realtor organisations such as the FNAIM said that house prices were dropping slightly in the provinces but holding up well in Paris.  Year on year increases per square meter would not be as high as in 2006.  


Prospective buyers were negotiating hard on price.  Real estate advisors found that they were having to manager vendor expectations and to advise vendors to post a lower sales price than they had expected to get only three months ago.

At the end of 2010 the situation is very different.  Apartment prices in Paris are increasing at least 10% year over year.  The reason for th