2023-05-24 06:15:31
According to the note on the real estate situation of Notaries of France, the real estate market now seems to have entered a new era under the effect of the upward movement in mortgage rates for housing which penalizes borrowers.
In their report on the real estate situation, the Notaries of France present trends and developments in real estate prices.
The volume of used housing transactions is contracting
After an exceptional upward period from July 2020 to August 2021, the annual transaction volume of existing housing is contracting. It reached 1,083,000 transactions at the end of February 2023, down -8.1% over one year, returning to the level observed just before the health crisis. The decline suddenly accelerated from July 2022. At this rate, the volume of transactions might drop below the one million mark at the end of the summer, especially since a reversal seems unlikely in view of the inflationary context and rising interest rates, aggravated by difficulties in the new home market.
A downward trend in volumes which suggests a fall in prices to come
This downward trend in volumes foreshadows a fall in prices to come: according to the projections from the preliminary contracts at the end of May 2023, prices would only be up very slightly at the end of May 2023 (+ 1, 3% over one year) and the changes in price indices over 3 months show a drop of -0.9% at the end of May 2023.
In the provinces, following an increase of +6% over one year in Q4 2022, prices should only increase by +2.4% over one year at the end of May 2023.
In Île-de-France, from January 2022 to January 2023, the prices of existing housing increased by +1%. In Paris, the price per m² of old apartments reached 10,410 euros in January 2023 (i.e. -1.6% in one year) and should fall to 10,250 euros/m² in May 2023 (i.e. -2.7% over one year). In the inner suburbs, we expect prices to fall by -3.4% and -1.2% in the outer suburbs. It had been 7 years since we had seen annual declines in apartment prices. That of old houses should stabilize at +0.2%.
The real estate market seems to have entered a new era
According to Notaires de France, the real estate market now seems to have entered a new era under the effect of the upward movement in housing loan rates which penalize borrowers. First-time buyers with the lowest incomes are the most directly affected by this context and have, for the most part, disappeared from the real estate market. To hope for a recovery, it would be necessary for the fall in prices to continue and for borrowing conditions to become more favorable to buyers.
On the new side, the situation is tense. The rise in the cost of raw materials, new environmental standards, the scarcity of land due to the Net Zero Artificialisation (ZAN) set for 2050 are leading to rising building costs and plunging the new home market into a crisis that worries the all real estate players. A crisis accentuated by the gradual loss of attractiveness of the Pinel system. The French Building Federation (FFB) qualifies the last quarter of 2022 on the new home market in the diffuse sector, with its 38% regression, as “the worst year in the last sixteen years”.
1684911680
#Notaires #France #real #estate #market #entered #era
