Demand from Geneva residents for property in neighbouring France is driving up house prices and inflaming local passions, according to a French parliamentarian.

Claude Birraux, deputy for the department of Haute-Savoie, says the Swiss city's chronic housing shortage is to blame and he has called on the cantonal authorities to act.

Since 2004 Swiss citizens have not required a residency permit to live in France, under a series of bilateral accords signed two years earlier between Switzerland and the European Union.

This, coupled with the attraction of lower property prices and a cheaper standard of living, has proved irresistible for many Geneva residents.

But Birraux claims the influx has driven up prices on the French side of the border to such an extent that many homes are now beyond the reach of locals who are being forced out of the area.

"This has put very strong pressure on the cost of land, apartments and homes, and today the difficulty for us is to find homes in France for people working on French salaries," he told swissinfo.

"Young people can no longer buy flats because they're too expensive, but what is too expensive for us is still 40 per cent cheaper than in Geneva. People are starting to get frustrated."

"Swiss factor"

According to Franklin Vallat, manager of Annecy-based Vallat Real Estate, property prices in some areas have doubled in recent years thanks to what he describes as the "Swiss factor".

He said many Geneva residents anticipated the changes under the bilateral accords and started snapping up land and property in 2000.

In conjunction with the general rise in the French housing market, this has helped push prices in residential hotspots up from SFr2,500 to SFr5,000 ($2,000 to $4,100) per square metre.

With the market now saturated in areas like Annemasse and St Julien, Vallat forecasts that Swiss speculators will home in on the city of Annecy once a planned motorway is built. This would cut the one-hour journey time from Geneva by half.

Birraux says the authorities in Haute-Savoie have considerably upped construction of affordable housing over the past two years to make up for the shortfall but claims they still cannot satisfy demand.

He believes it is high time Geneva put a rocket under its stagnant housing market to encourage more people to stay in the city rather than move to France.

"We need to face up to the problem and find solutions on both sides of the border. I know housing policy is changing in Geneva but we need to find a better balance," said Birraux.

High house prices

But Laurence Coudière, spokeswoman for an association representing cross-border workers, says the French parliamentarian is wrong to blame high house prices solely on the Swiss.

"This phenomenon has been observed right across France. It may have been more acute in Haute-Savoie, but that's because it's always been an expensive place to live – even before the bilateral accords."

Coudière warned that some politicians were looking to make political capital out of the issue ahead of elections in 2007, adding that the same arguments had surfaced ahead of the bilateral accords.

Her point of view is shared by Bernhard Gaud, head of an association of 17 villages on the French side of the border.

"If prices have gone up... the French are just as much to blame as the Swiss," he told the Tribune de Genève newspaper.

Responding to Birraux's comments, Mark Muller, head of canton Geneva's construction department, said he had no intention of being dragged into a war of words. He too pointed out that the issue of Swiss living in France had become a political football ahead of next year's elections.

But he strongly denied the charge that the Geneva authorities were not doing enough to solve the city's housing crisis. Muller pointed to an accord struck earlier this month that should see the local government invest SFr300 million in affordable homes over the next decade.

"There is a strong will to construct more housing in Geneva – it's in our interests to do so," he said.

swissinfo, Adam Beaumont in Geneva

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