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Housing minister denies slump

French housing minister Christine Boutin does not believe that French property prices will crash, claiming that, in France, demand is still greater than supply. “In my opinion there is not a crisis,” she told the newspaper La Tribune. “While demand remains very strong and the supply stays the same, personally I do not believe that there will be a strong decrease in prices.

It is necessary to build, build and build some more.” Addressing those who continue to be concerned, Boutin explained that the slowdown witnessed in the last quarter is not comparable to the crash of 1990-1992, where demand was low. Instead, the recent deceleration was a consequence of the worldwide financial crisis, which is forcing French banks to be more cautious. The health minister promised to keep an eye on interest rates. According to Boutin, rate rises have cut purchasing power by 12% since 2005, with a further 2% drop between April and May this year as the European Central Bank upped the rate by 0.25%.

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