In a communication to the Committee on Finance, the general rapporteur of the budget in the Senate, Philippe Marini, said Tuesday that "it is not implausible to imagine a decline in house prices double-digit over the next two years. "
Based on studies of the French Observatory of Economic Conditions (OFCE) and IMF on OECD countries between 1970 and 2002, Senator Philippe Marini held that "the real estate market has reached a high point "and a" turnaround "is" highly probable ".
According to him, "situational factors increase the demand" for housing had "burn out", while "household solvency appears highly degraded."
The government must make a choice
Philippe Marini, the government faces a "dilemma": "helping the middle class households primary acquirers, undoubtedly impoverished by rising house prices, the risk almost proved to feed inflation of the market, or allow the adjustment being effected, caused by the limited procurement capacity of households to facilitate a soft landing. "
Given the implications of this situation in terms of GDP growth, Mr. Marini "calls on governments to be cautious to avoid an over reaction of the markets, decline, with a risk for growth, as well as rise, with the risks associated with the creation of a bubble. "
source: Batiactu
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