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Property ladder now out of reach for many French

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Property ladder now out of reach for many French
Photo: AFP
18:05 CET+01:00
Buying a property in France is a dream for many foreigners and its starting to appear that way for the French themselves. In recent years locals in cities across France have found it more and more difficult to find the money to get on the property ladder.

The chances of buying property in France are dwindling, according to a new study by the Paris-Dauphine University and mortgage specialists Crédit Foncier.

The report revealed that despite lower interest rates household the spending power to get on the property ladder has gone down significantly between 1998 and 2010, leaving the dream of owning a house or apartment out of reach for many.

In 1998 some 44 percent of households in Paris were able to afford a property corresponding to their needs but that figure dropped to only 27 percent by 2010.

And it's not just Paris that's affected, indeed all of France's major cities have seen a drop in the capacity of locals to get on the property market.

Marseille takes the lead with a loss of 42 percent drop in the property buying power of locals within the 12 year time frame, followed by Paris with 39 percent, Lille with 25 percent and Bordeaux with 24 percent.

"The decline of the real estate buying power is mainly due to the increase in property prices and the impact of the crisis in recent years," the study read.

Wages may have increased by 23 percent on average from 1998 to 2010 but housing prices doubled within the same period.

"The rise in house prices was not accompanied by a similar increase in wages, although the increase in loan terms and lower interest rates helped increase the solvency of households," the study added.

People in their fifties and sixties have the best chances of acquiring property whereas the dream is much less likely to come true for those in their thirties.  

Only half of 30 to 35-year-olds are in a position to buy property corresponding to their needs in a regional city. In Paris it’s a mere seven percent.

As for the average 55 to 60-year-olds, some 75 percent have enough purchasing power to acquire property in regional cities and some 50 percent could get their hands on one in Paris.

Chances of buying property in Paris are low for the average 20 to 25-year-olds whose purchasing power is near zero in the capital. 

However there is some good news for those desperate to buy property in Paris.

As well as interests being low, the astronomical prices of property in the French capital continue to fall.

According to a real estate report this week property prices in the French capital have fallen 3.5 percent since the start of summer.

After falling around 1.5 percent in July and August the trend has continued with a one percent drop in September, according to the report by MeilleursAgents.

Since March 2011, when the housing market peaked, prices in the capital have dropped by a whopping 9.1 percent. Good news for buyers, not so positive for homeowners.

by Simone Flückiger

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