The dynamic of investment in second homes has experienced two shocks since 2019:
- The consequences of Covid from Spring 2020
- The sharp rise in rates from Spring 2022
Pretto therefore analyzed demand over 3 successive periods:
- Period 1 (January 2019 - February 2020): pre-Covid market context
- Period 2 (March 2020 - April 2022): impact of successive confinements
- Period 3 (May 2022 - February 2023): impact of the rate hike
After a strong post-covid increase (+37%), demand only fell by 10% with the rise in rates
By analyzing the simulations carried out on Pretto.fr between January 2021 and February 2023, it appears that:
- The Covid had pushed up the demand for second homes, rising from 3,5% to 4,8%, an increase of 37%.
- The rise in rates contracted demand for second homes, which fell from 4,8% of total demand on average over the second period of the analysis to 4,3% over the third, ie a drop of 10%.
Demand from Ile-de-France residents is directed towards the whole of France when that of other French people is more local, with little change between periods
On average, 50% of secondary residence applications are intra-regional. However, there is a minimum in Ile-de-France where only one in five requests is, a sign that this is also massively heading towards other regions, mainly Normandy, New Aquitaine and Brittany.
A particularly marked drop in demand in Ile-de-France, Provence-Alpes Côte d'Azur, and Auvergne-Rhône-Alpes
Since April 2022 and the sharp rise in rates, there have been very slight increases in demand in some of the most sought-after regions (+3% in Occitania and +1% in New Aquitaine), but much steeper falls in Ile-de-France (-12%), Provence-Alpes-Côte d'Azur (-14%), and Auvergne-Rhône-Alpes (-16%).
Continued strong demand from similarly profiled borrowers, but as market conditions tightened, their level of fundability declined
The average profile of applicants has not changed markedly, with a high average age for a real estate project (45 years), comfortable incomes (>6.600€/month) and a stable budget of around 260k€.
However, credit conditions tightened at the same time (greater contribution, higher rate, longer durations, more restrictive counterparties), which led to an increase in the share of applications for non-financeable second homes.
We thus note that, of all the categories of demand for mortgages, that for second homes saw its share of non-financed increase the most compared to 2021, with an increase of 50% in December 2022 compared to January 2021, against 30% for all real estate projects over the same period, these projects being therefore more complex to carry out.
While nearly 50% of simulations for second home projects were fundable before spring 2022, this share fell to less than 30%, thus excluding nearly 1 in 2 previously fundable projects.