American real estate in a sub-prime downward spiral, British homeowners struggling as 'generous' mortgage deals are withdrawn, Spain's skyrocketing property prices now gripped by gravity… You'd be forgiven for thinking that the 'Credit Crunch' will leave no corner of the international property market untamed.

But listen to French banks and property agents and an alternative picture emerges, one where investing in property still makes sense.

Indeed, Jean-Pierre Landau, second deputy governor of Banque de France, said this week: "There is no credit crunch in Europe and the International Monetary Fund has been too pessimistic in its growth forecasts for the region.

"Today, in Europe there is no credit crunch," he added, decisively.

Landau was responding to news that Crédit Agricole (CA), France's largest co-operative bank, suffered a net loss of £656m in the final quarter of last year, with the crisis in the financial markets blamed for the bank having to write down its value.

But Landau is no lone voice in the apparently darkening financial wilderness. A recent statement by the Tarn-et-Garonne office of property agency VEF noted that "Serious buyers can actually get some very good bargains at the moment which can off-set the falling exchange rate." The reasons behind this were explained as follows: "Properties that appeal more to the British buyer than to the French have not been selling as quickly as many owners would hope, mainly because of the slow down in the UK housing market and the exchange rate. Consequently some vendors have lowered their prices."

Furthermore, many forecasts suggest that the Tarn is not a needle in a rotting haystack. Predictions of price growth in the French property market this year generally fall between 4 and 8 per cent.
 
However, the Guide Foncia des Prix, recently released by the FONCIA property group, is a little more circumspect, predicting growth of 3 per cent over the next six months. Even so, the guide highlighted several locations scattered across France that look promising into the mid-term.

One was Fleur et Peintre, a residential area of Béziers, in the Languedoc.

Says Alex Charles of Crème de Languedoc, "The area flagged up by FONCIA is about five minutes drive from the town centre, near the Cave Cooperative, so it's well-located for access to the heart of Beziers, and the huge new shopping centre and public library (both due to open in 2008). The city is currently undergoing a dramatic facelift, so now could well be a good time to invest."

This follows on from the start of Ryanair flights from Bristol to Béziers at the end of March 2008. "This is massively exciting for the town and this part of the Languedoc region," comments Charles. "Prior to this, Béziers had no overseas air connections – so property in and around the Béziers area should see a definite increase in value."

Another French city that has benefitted from the low-cost airline affect is Rodez, in the Aveyron.

"Since the arrival of low-cost flights in 2003 property prices have risen by a huge 30 per cent," reports Nav Vilain from Selection Habitat.

And there could be further increases to follow: "A new route from Dublin to Rodez launched on 5th April and will increase this demand further still," adds Vilain.

As the Aveyron's average property price per square metre is 1,700 euros – 650 below the national average – there is clearly plenty of room for growth. With farmhouse renovation projects available for 40,000 euros, and character properties such as former convents with exposed beams and a tower for 250,000, the Aveyron could be one of those crunch-resistant areas that reminds us of the French love of doing things differently.

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For more information visit:
www.vefuk.com
www.creme-de-languedoc.com
www.selectionhabitat.com

Article first published 10 April 2008