This article in Le Monde from last November says that prices are on the rebound, but raises the possibility that this may be a false start and that prices will dip a bit more in 2010. It says that apartments dating from the ‘60s and ‘70s aren’t moving well because they’re not energy efficient. It also says that real estate in Normandy isn’t rising as elsewhere because the British have pulled out of the region and dumped their vacation properties. Marseilles, Grenobles and Alpes-Maritimes are also still lagging.
If you’re considering buying rental property, management agencies will skim about 8% of rental income, and take a commission on finding renters and arranging maintenance. Don’t consider by-passing an agency and renting it out yourself; there are way too many byzantine laws involved, and you can easily get screwed. On the positive side, French property taxes tend to be quite reasonable.