Real estate: fall in prices in the old in the first quarter, a first since 2015

2023-05-30 11:15:42

Old house prices fell 0.2% in Q1, index shows Notaries-INSEE which refers to. This is the first decrease recorded from one quarter to another since June 2015. The notaries’ index, based on sales that have definitely been concluded, reflects market trends with a few weeks’ delay, but it is the most comprehensive indicator.

Over one year, prices increased by 2.7%, a very marked deceleration compared to the end of 2022 (4.6%), driven in particular by houses. These continue to grow faster than apartments (+3.1% against +2.2%), as has been the case since 2020, but the gap is closing rapidly compared to previous quarters. Moreover, in the first quarter of 2023 alone, the trend was reversed: the price of houses fell more than that of apartments (-0.3% against -0.1%).

In a context of inflation, real estate suffers from the rapid rise in interest rates, which heavily penalizes households having to borrow to acquire a property. Prices over one year are now down in Ile-de-France (-0.6%), while they are still rising in the provinces (+3.9%) despite a pronounced deceleration. The number of transactions over 12 months is also estimated at 1.07 million, down sharply from the previous quarter (1.12 million) but still well above the historical average.

Pay more or reduce the area

“The real estate market seems to have entered a new era, with increasingly high interest rates”, underlines the president of the statistical commission of the Notaries of Greater Paris, Elodie Frémont. “So it’s a real shock that is suffered in this trimester,” she says. Loïc Cantin, president of the National Real Estate Federation (Fnaim), believes that this is a reversal in the possibilities of household acquisitions “It is the first reversal of the trend, which is a strong marker the impact of the reduction in the borrowing capacity of all French households faced with the acquisition of real estate. “The first-time buyer, he is there, there is a need for housing, but he still has to make a choice now”: pay more or make sacrifices on the surface, details Elodie Frémont. The notaries also recall that those who are refused a loan are always numerous according to the notaries.

“The structural lack of housing and low credit rates is what has caused prices to have multiplied by 2.5 in 20 years. There, we feel that this is the end of this phase, ”comments Corinne Jolly, president of Particulier à Particulier. This lack is not likely to be reduced, new construction being at a standstill, with a fall in the first quarter of reservations with developers (-41% over one year) and building permits (-11.5%).

The problem of “thermal strainers”

The Notaries of Greater Paris predict that the annual fall in prices should increase in the second quarter, approaching, for Ile-de-France, 5% for apartments and 3% for houses. “People realize that the house was not made for them”, comments Corinne Jolly. “They are moving away a little from the postcard image that there was at the end of confinement. »

Environmental regulations which will gradually prohibit the rental of thermal colanders are also beginning to have an impact on sales, note the notaries. In Ile-de-France, the share of housing classified G (the worst label) in transactions tripled between 2021 and 2022 for apartments (2.7 to 7.9%) and doubled for houses (3.6 at 8.5%), according to data from notaries. In the coming months, “there could be a two-speed market”, imagines Corinne Jolly, “with an influx of offers for thermal colanders because of sellers who do not know what to do with them”.

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