The Notaries-Insee index published Thursday, which is a benchmark for its completeness, shows an increase of 0,5% over one year in prices in France (excluding Mayotte).
This is a very clear slowdown since mid-2022.
From 6,8% in the second quarter of 2022, the increase fell to 6,4%, 4,6%, 2,7% and now 0,5%.
“The Roaring Twenties are over; we are going to move to another real estate paradigm,” immediately warned Elodie Frémont, president of the real estate statistics commission of the Notaries of Greater Paris.
Inflation and rates
The causes are multiple, but the main one is the surge in interest rates, which have increased the cost of credit, underlined Ms. Frémont.
“From now on, we must save, or in any case make substantial contributions, so that the credit file can even be examined, we are not even talking about its success upon exit,” she observed.
“It’s the revenge of cash,” for those who have the means, she added, noting “a small rebound in family loans, friendly loans, and a lot of help from mom and dad thanks to donations. "
Inflation, which is affecting households' remaining lives, is also pushing prices down, particularly for houses, noted Ms. Frémont.
“When you have a house, you need a vehicle, so this is felt in the price of gasoline, it is felt in energy consumption and it is felt in the event of a sale with the energy standards which are now restrictive, when you are poorly rated, to carry out renovation and (...) an energy audit".
Houses, whose prices had exploded in 2020, upon emerging from confinement, nevertheless still remain on the rise across the country, with prices increasing by 0,9% over one year. Unlike apartments, whose average price has not changed.
If buyers are under pressure, so are sellers. With prices falling, those who can withdraw their goods from the market, and "the one we find around our table is the one who finds himself in a financial situation which forces him to sell, or a personal situation which means that he has no choice: divorce, separation or inheritance,” noted Ms. Frémont.
Consequence: the number of transactions, an indicator of market activity and which had reached an absolute record (more than 1,2 million) in 2021, continues to decline rapidly.
For the whole of France excluding Mayotte, it stood at 1 million, a figure still higher than the historical average, INSEE nevertheless notes.
Drop in sight
A general drop in prices, already observed by agency networks, should not take long to arrive.
“Without a doubt, the decline will accelerate,” judges Thomas Lefebvre, scientific director of Meilleurs Agents.
Interest rates have in fact accelerated their rise from the first quarter, when the State relaxed the grant conditions.
“The purchase becomes less and less financially attractive, because to make your purchase profitable, you have to wait longer and longer,” Mr. Lefebvre also remarks.
Guillaume Martinaud, president of the Orpi agency network, also points the finger at housing policy, judging the conditions of access to credit still too restrictive.
Several measures are likely to dissuade real estate investment, he also judges, such as the increase in property taxes in many cities, the end of public aid or renovation obligations.
“All of this doesn’t help to provide more housing on the market,” he grumbles.
Illustrative image of the article via Depositphotos.com.