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“Blowdown” on the real estate market, the French suffer from the rise in interest rates – RT in French

The real estate market has experienced an unprecedented decline in seven years in France. Along with a relative decline in prices, borrowing conditions are tightening. The French are less and less likely to materialize their purchase plans.

After seven years of growth, the French real estate market is showing signs of weakening, weighed down by the drop in transactions. This decline should reach “20% compared to 2022”, according to a forecast study by Meilleurs agents (MA) published on September 5. The real estate valuation site reports a “brake” on the tricolor real estate market.

Faced with this decline in purchases, that of prices logically began. A dynamic which should “accelerate” according to MA, who estimates that prices should “thus fall by 4% within a year” against a drop of “0.4% over the last 12 months”.

An overall decrease, at first sight timorous, which contrasts with that recorded in certain agglomerations. The price of stone in Bordeaux fell by 8.6% in one year, closely followed by Lyon and an 8.1% contraction in the price per square meter, making them the two major cities “which have fallen the most in these 12 last few months,” according to MA.

If certain agglomerations resist, it is to a very slight extent, such as Lille and Toulouse (+0.7%), as well as Marseille (+2.2%). The scientific director of Meilleurs agents Thomas Lefebvre believes in Le Figaro that the decline “concerns half of the municipalities of France”. The most symbolic drop in prices remains that of the capital. In Paris, the average price per square meter fell below 10,000 euros and stood at 9,944 euros on September 1, for an annual drop of 4.5%.

The number of loans granted by banks in free fall

However, these reductions do not constitute, for the time being, a boon for buyers who have to go through the bank box. Indeed, interest rates have risen significantly under the impetus of the European Central Bank and its policy of fighting inflation, leading it to regularly raise its key rate. The last revaluation to date dates back to August 2, with an increase of +0.25 points.

With an average interest rate of around 4% for a loan over 20 years, the number of buyers on the market is tending to drastically decrease as banking establishments refuse loan applications. The CSA housing credit observatory estimates that the number of loans fell by 50% in July over one year.

After record years, the volume of sales should, according to Meilleursagents, fall below the 900,000 transaction mark in 2023. A level equivalent to the year 2016, after peaks at 1.13 million in 2002 and 1.17 in 2021.

A scarcity of players in the real estate sector which will go hand in hand with that of tax receipts, under transfer duties (notary fees). Thus, in the name of ensuring access to property for “solvent” French people, Bercy pleads for the relaxation of borrowing conditions a few months after having forced the banks to toughen their supervision.

RT All Fr Trans

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