Inflation, difficult access to credit, energy crisis and new state rules dictating energy ratings… The real estate market has been turned upside down in recent months. Those who still dream of buying a property must adapt to this context. The good news is that if a buyer is able to adapt, it could be the best time to buy.
All of these recent developments may be difficult, however, they may have a beneficial effect for the purchasers: the crisis arrived at the moment when the prices were at the highest. The result: in the major French cities, they have fallen to + 0.2% in January in the ten largest cities (excluding Paris), according to MeilleursAgents. In Paris and Lyon, values have even started to fall, except for high-end properties. This is not a collapse, even though the supply of available housing has increased almost everywhere and buyers are negotiating.
Many sellers are unwilling to lower their asking prices, preferring to wait until they see more clearly. In many cases, therefore, a wait-and-see attitude is the order of the day. “On the other hand, in 20% of cities with more than 40,000 inhabitants, prices have risen by 10% or more over the past year,” according to Michel Mouillart, spokesman for the LPI barometer. In almost all cases, these are provincial cities with prices of up to 2,500€ per square meter, which attract households that are being kept away from large cities by credit restrictions.
As for the second home market, “it has remained dynamic,” notes Olivier de Chabot-Tramecourt, director of the Mercure Immobilier Group. It has been facilitated by the development of telecommuting. However, it remains conditional on location, with many properties located less than two hours from the workplace, and on access to services: shops, health care, schools, etc.
“It’s time to buy”, Caroline Arnould, president of the Association professionnelle des Intermédiaires en Crédits (APIC)
Many loan applications have been refused by banks in recent months. Banks currently tend to favor borrowers with a large down payment and residual savings, and favor profiles with comfortable monthly incomes, around 5,000€ for some institutions. This penalizes first-time buyers and increases inequalities in housing. So if you fit this category, it may be a good time to invest.
Rates should continue to rise until June and July. So now is the time to buy. Because interest rates are still low, and lower than inflation. One should not hesitate to act on the cost of the borrower’s insurance, and to make use of all possible measures, such as the zero-rate loan (PTZ). The monthly usury rate is a good thing for those who can take out a loan. It is therefore important not to hesitate to resubmit a loan application that was refused the previous month.
The new housing market is facing a paradox: while new homes have all the criteria that the French want – including good sound and heat insulation – the supply is slowing and often too expensive for first-time buyers, due to the rising cost of raw materials and land. “The decline in the new housing market in France is expected to continue in the first half of 2023 before stabilizing in the second half of the year, with pressure on sales prices,” explains Véronique Bédague, CEO of Nexity.
It’s often said that the real estate year takes place in the spring. Also “the month of March will be decisive in the trajectory that the market will follow,” according to the Notaires de France. The beginning of the decline in the number of sales and the deceleration of prices may be just the sign of a return to normal: 2023 may be a year 2022 in reverse, with a more dynamic second half, marked by a return to reason and “a decline in sales that could be 10% over the year,” says Loïc Cantin, president of Fnaim.
The French are likely to be less numerous to be able to become owners in 2023, but the real estate market could just as easily continue its decline, given the number of clouds that are gathering over it, even if the attraction of the French for the safe haven of the older buildings remains strong. The international context as well as the social tensions at home do not give any certainty on this subject.