In a review of the outlook for property prices in Paris and the Ile de France, the Chambres de Notaires de Paris this month considered three possible scenarios for the market in 2009.

Their own reticence to come out with a single forecast is due to too many uncertainties in the economic outlook.

Whatever the outcome, the notaires consider that little improvement in the market is likely before the last quarter of 2009.

In their first scenario, which they term the scénario de crise, the notaires forecast that household confidence continues to decline, with a wait and see attitude that retains hold amongst buyers.

The number of sales would drop by around 20% from those of 2008, already a year in which sales in the Ile de France are down by around 15%.

Whilst they make no forecast how far prices will fall, the notaires consider that the impact would be most strongly felt amongst middle range properties, with owners simply unable any longer to hold off on the sale of their property, and obliged to sell below their aspirations.

In the second, most optimistic, scenario, the notaires forecast a stabilisation of prices, brought about by the return of buyers through the drop in interest rates and a return to normal bank lending.

The notaires consider that if bank interest rates continue to drop, then many buyers are likely to be tempted back into the market place in the hope of picking up a bargain before prices start to rise again, and because an increase in buying power enables them to do so.

Finally, in the third scenario, the notaires forecast that the market would continue to function in a rather listless manner, with prices falling only modestly by around 5% next year.

Implicitly, it is clear the notaires believe this the most likely outcome, if only because they consider some of the factors likely to bring about such an outcome are already present.

These factors include, on one side, a reduction in the level of interest rates, lower prices, and strong demographic demand. Conversely, they are offset by continuing economic difficulties, growing unemployment, and the fear of unemployment amongst those still in work.

Whist under this scenario there remains the strong interest amongst households to enter the market, many are reluctant to do so, or only do so with care, until some of the more important fundamentals in the economy start to improve.

Over the long term, the notaires consider the fundamental outlook for the market remains strong, driven principally by strong demographic demand and the deficit in the number of homes.