Calm in the second home market
During the 1st deconfinement in May 2020, the French had massively turned to second homes, a trend confirmed in 2021 with a further 30% increase in requests. Two years after the health crisis, in an uncertain economic environment, the trend is cautious with demand still 17% higher than in 2019, but down 7% from January to April 2022 compared to the same period in 2021 .
“2021 has been an exceptional year on many fronts, including for the highly sought-after post-Covid second home market. The market then tightened in many regions to the point that there are now only a few properties left for sale. The beginning of the year 2022 clearly begins a general lull after the frenzy of 2021”, analyzes Pierre Chapon, president of Pretto.
More than 2/3 of buyers of a secondary residence already own their main residence
The French wishing to acquire a second home are in their forties (45 years old on average), have a net income per household of around €6 and more than 000/2 of them are already owners. The amount of the contribution increases slightly by 3% as well as the price of the property up by 5%.
“In the current situation, borrowers who have no current credit on their main residence will be favored by banks. For the others it will be necessary to think of proposing to his banker a repurchase of the credit in progress if it is possible, or to propose to place savings to improve its capacity of negotiation”, says Pierre Chapon, President of Pretto.
The French rely on proximity: 50% are looking for a property less than 140 kilometers from their main residence.
The PACA region, the new queen of second homes
With 14% of requests, the Provence-Alpes-Côte d'Azur region has relegated Occitania to second position. The Var, the Alpes Maritimes and the Bouches du Rhône are the most popular departments.
Occitania comes in 2nd position (13% of searches). Hérault, Gard and Pyrénées-Orientales occupy the top 3 of the most sought-after departments in the region.
Finally, with 12,4% of searches, the Auvergne-Rhône-Alpes region moved into 3rd position this year. The most sought-after departments are Haute-Savoie, Savoie and Rhône.
Normandy still very attractive for Ile-de-France residents
“No surprise seeing this ranking: Ile-de-France and Normandy have the advantage of proximity and diversity of properties. It should be noted however that, with properties becoming scarce, the real estate market is showing signs of running out of steam in some places”, underlines Pierre Chapon, president of Pretto.
While the inhabitants of Ile-de-France primarily target their region of origin (1%), Normandy is also very attractive with 22% of searches. Calvados, Eure and Seine-Maritime being the most popular departments.
Finally, the PACA region comes on the 3rd step of the podium with 9,7% of searches. Unsurprisingly, Ile-de-France residents seek out the same departments there as the rest of France.
Strong price disparities:
- Average property prices are particularly high in the PACA and New Aquitaine regions, exceeding 300 euros, far ahead of those in Normandy or the Loire Valley, which are around 000 euros.
- The average intake in the PACA region is 1,4 times higher than the average intake of these 5 regions.
Get the best financing
1. Already owning your main residence: a category which represents more than 2 thirds of the files financed. Tenants of a main residence will have fewer possibilities of being financed because it does not make sense, in the eyes of the banks, to combine the monthly payment of the loan and the rent on their main residence. Indeed, unlike a rental investment, the purchase of a second home does not generate additional income.
2. Have a debt ratio below 35%: the HCSF also applying to second homes, it is necessary to have a level of indebtedness lower than 35%. The directives of the High Council also specify that 80% of the derogatory margin (that is to say of the files financed above the threshold of 35% of indebtedness) must be allocated to financing of main residences. An imposed exercise to which the banks comply.
3. Present at least 10% contribution: banking institutions are often more demanding on the level of amount contributed to the project for the financing of a second home than for another type of project.
4. Show the bank that it will not be… secondary: For borrowers who already have a mortgage, for example for the main residence, it is preferable to place their two loans in the same bank to ensure a more interesting overall relationship for them. Two solutions are then possible: finance his second home in the same bank as his main residence, or offer to buy back the loan of his main residence by the bank able to finance the purchase of the second home. With the current rate hike, there is little chance that this takeover will materialize, but the simple fact of having offered it is a good signal sent to the new bank. In this case, offering a transfer of savings in addition to further embellish the loan application is always a good idea.