2023-08-26 13:30:55
After two years of post-covid real estate euphoria, the market seems to be rebalancing: since the start of the year, transactions have become rarer. In question: the rise in credit rates which prevents many potential buyers from realizing their project.
Blow of blues among real estate agents! After the health crisis, the market was in full euphoria and the prices too. Two years later, real estate agencies are struggling, with fewer transactions: the rise in credit rates is preventing many potential buyers from realizing their project.
Apartment in the city center of Limoges • © Mathilde Baralle – France Télévisions
Example with this renovated apartment, located in the heart of Limoges, rue Jean-Jaurès. It was almost sold, but bad surprise for the buyers, the interest rates were revised upwards. The sale did not go through, as indicated by Emeric Parent, real estate advisor-KW Limouzi: “we had signed a sales agreement. Unfortunately, there was a lack of funding. As a result, we have just put the apartment back on sale“.
What was less predictable was this very significant rise in interest rates, and at the same time, a reduction in the real estate purchasing power of our buyers.
David Vergne
President FNAIM of Haute-Vienne
Since the beginning of the year, real estate agents have observed a drop in transactions: less 10% in Limoges, less 15% in the agglomeration. After two years of post-covid real estate euphoria, the market is rebalancing. This is explained by David Vergne, FNAIM president of Haute-Vienne: “What was less predictable was this very significant rise in interest rates, and at the same time a very significant reduction in the real estate purchasing power of our buyers, of the order of 30 to 40,000 euros on average. Purchasing projects are therefore very different“.
For example, for a property of 200,000 euros, in a few months, the buyers have lost 40,000 euros of borrowing capacity.
With fewer buyers and prices not falling, agencies are beginning to experience difficulties, continues David Vergne: “even if we return to levels which, for the moment, are still acceptable, we are only at the beginning of this drop in activity“.
Only solid real estate agencies will be able to get through this crisis. The market is blocked, although a price decline might begin to begin.
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