After several years of low rates, the inflationary surge that appeared in 2022 and continued into 2023 had the effect of a bomb on the real estate market.
While we were borrowing at a rate of around 1% over 20 years in January 2022, the figures literally exploded until reaching 4.35% at the beginning of November 2023 for a “good” rate (better than the average rates observed), according to the brokerage company Best rates.
Logical consequence: the French are in uncertainty and the market is seized up.
Generalized wait-and-see attitude
In such a context, the number of credits has obviously fallen. Thus, 9.2 billion euros in housing loans were granted to households in September according to the Banque de France, the lowest level since 2016.
If buyers no longer have the means to achieve their ambitions, sellers are caught in a pinch.
On the one hand, they are in fact facing a slight drop in property prices which reaches almost 1% on average in mainland France and up to -3.9% in Seine-Saint-Denis according to the association. Finance for all, supported by institutional actors; on the other hand, they too have a purchase project which is hampered by high interest rates, as well as the current difficulty of obtaining a bridging loan to finance their acquisition.
Although the rise in rates is starting to slow down at the end of the year, “the number of real estate transactions remains at half mast. Buyers are very wait-and-see and tend to abandon their acquisition project in the face of severe borrowing conditions. Comfort purchases are in fact fewer. Currently, nearly 50% of sales are forced (separation, transfer, expulsion, etc.)”, as analyzed Artémis Brokerage in mid-November.
Faced with current tensions, the very profile of buyers-sellers (or second-time buyers) has changed, as recently echoed by Patrice Amate, president of the Trets real estate company for twenty-five years. “These clients request visits, without knowing their budget or their timing. If they engage in active prospecting, they have not had their property for sale valued, nor taken into account the drop in prices.”
On the other hand, for their acquisition, they have already integrated the negotiation before the visit. “An attitude which shows the extent of the lack of education on this subject, and which further hampers the market,” explains the real estate agent.
And to denounce “this phenomenon of walkers” which in fact makes any purchase offer unrealistic and forces professionals to carry out more drastic sorting to organize qualitative visits.
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