The Housing Market

In this article I am going to describe the French and the Spanish housing market which are both approaching new phases. Regarding the French market, since 1996 prices went crazy, indeed they grew by 135%. In the beginning of 2007 we noticed that prices were more constant. According to many expertises, the market will calm down during the next years.
Usually after a big growth we are used to see prices going down, as in United States due the summer credit crunch. But in France there is no reason that prices go down as well, since the growth wasn’t a speculative one, as in United States or in Spain. Moreover the demand for housing is reasonable and the offer of house or flat is still very low. This is why I think that the French housing market will not follow the American crisis, which was due to the high risk mortgage.
But I think that the Spain housing market is going to pass through the same crisis than in the United States and that the prices will sharply decrease. The principal problem is that in Spain there is no law in order to forbidden high risk credit to the population. Consequently many poor Spanish people bought a house in order to become owners. Logically since the demand was high the prices increased sharply. Moreover investors from the all world invested in the Spanish market as well. This is why I think that this speculative bubble will exploded and that Spain will unfortunately live the same crisis than in the United States.