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I didn't follow it closely, but wasn't some proposals from the UMP or the government making the round for allowing to use  house-equity for backing consumption loan?

Anyway, "quand le batîment va, tout va", and I believe it is a main reason why the growth in France or Spain is so positive. I'm not sure you can't call it a froth in France. The prices went up across the board. Plural of anecdotes is not datas, but people I know are quite frenetic about investing in houses with the low interest rates we had.

Maybe they feel the ECB won't allow it too long. One wonder why ;-)

La répartie est dans l'escalier. Elle revient de suite.

by lacordaire on Tue Aug 29th, 2006 at 05:45:44 AM EST
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Yes the law is there since a few monthes ago but no commercial I know of yet.

There's no question that prices went up in a bubble fashion, just about what will happen to consumers and the economy when they go down or flat for a while.

by Laurent GUERBY on Tue Aug 29th, 2006 at 08:36:04 AM EST
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And about precisely how rising property prices have fueled consumer demand only over the past 18 months...
by afew (afew(a in a circle)eurotrib_dot_com) on Tue Aug 29th, 2006 at 10:19:15 AM EST
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Brad answered:


Laurent, I am not an expert on France, but Daniel Gros's work convinced me -- atm or not -- the wealth effect from rising housing prices seems well correlated with rising consumption/ domestic demand led growth and current account deficits in europe.

Now I have to look after more data :).

by Laurent GUERBY on Tue Aug 29th, 2006 at 01:48:44 PM EST
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