French Home Prices to Decline as Much as 3% Next Year

French home prices will probably fall by 2 percent to 3 percent next year as high unemployment and a stagnant economy deter buyers, according to an industry group.

Residential property values will drop 1.7 percent in 2014, the National Federation of Property Brokers said at a press conference in Paris today. In the French capital, prices are expected to decline 3.6 percent, according to the organization known as FNAIM.

“Investors need confidence, which is hard to find with rising unemployment and little growth,” FNAIM Chairman Jean-Francois Buet said at the briefing. “We’ll have a lot of geographical disparities again,” tied to local economic trends, he said.

The French economy barely grew in the past three years. Jobless claims have risen during President Francois Hollande’s first 2 1/2 years in office as he has raised tax levels to a record to reduce the country’s budget deficit.

The volume of sales of previously-owned houses and apartments may fall to about 700,000 in 2015, after rising 0.3 percent to 720,000 this year, FNAIM said.

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