Mario Draghi announced to the press this month that the European Central Bank is “comfortable” with pursuing further options to support the ailing European economy. Eurozone inflation stands at 0.7% and while this is a step in the right direction, there is concern that without further support the economy will simply stutter along and something needs to be done to give it a short in the arm.
Analysts expect a rate cut of 10bps from 0.25% to 0.15% next month with an asset purchase program (printing money) to be signed off next quarter. All this should begin to raise confidence in Europe, though interest rates will be expected to remain low. 10 year interest rates for the French government are now only 0.2% above their historic lows, likewise French 20 year fixed rate mortgages are also a similar amount above their lowest level standing at 3.45%.
Overall, it seems like the market for French property will continue to look good for international investors. Property prices remain soft in all but the most prime areas and availability of finance is good with many banks now looking to return to the market for mortgages for non-residents in France.