S&P sees deeper house price falls in eurozone as slump engulfs core

"Downturns in the Dutch and French housing markets appear to be accelerating. We forecast nominal price declines of nearly 6pc and 5pc respectively this year as rising unemployment, decelerating wages, and the prospect of austerity measures frightens off buyers," said Jean-Michel Six, the agency's chief Europe economist.

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This is a gentler denouement than the 40pc crash predicted by French consultancy PrimeView, which describes the French market as a "gigantic bubble" vulnerable to a witches brew of demographic effects, tight credit and a loss of tax relief. It said prices had risen 160pc since 1998 at a time when household incomes had gained just 35pc.

PrimeView said aging will have a "profound deflationary effect" on the French market for the next quarter century. The pool of buyers will stay constant at 33m, while number of the sellers will rise at an average rate of almost 250,000 each year.