Guy Hoquet real estate barometer: the French have lost nearly 40% of their purchasing power - Journal de l'Agence

As every year, the real estateagency Guy Hoquet has published a new edition of its secondary real estate market barometer. What is the outcome of 2022 and what are the prospects for the future? Let's focus on the key points of this study, based on more than three million analyzed properties obtained from over fifteen real estate portals for individuals and professionals. With over a million transactions in the last 12 months, 2022 ended on a generally positive note for the secondary real estate market. In a dynamic supply environment, which increased by 4.8% compared to the previous year, prices continued to rise significantly, by 7.8% over the year. Another positive aspect was that more than 3.3 million properties were put up for sale in 2022, meaning that one in three properties was sold in 2022, and more than 8 out of 10 properties were sold through an intermediary. This indicates that sellers have also strengthened their trust in real estate professionals.

Interest in houses is starting to wane. While the dream of owning a private home supported the secondary real estate market until the beginning of the school year, this trend began to slow down at the end of 2022. Overall, over the year, the average price per square meter for private homes increased by 11.2%, while the supply, which grew by 9.2% compared to 2021, was abundant. However, after the price increase, it became clear that their value began to stabilize from September, and the supply started to decrease towards the end of the year. Another conclusion from the Guy Hoquet real estate barometer was the decline in the number of transactions month by month, especially since October.

Decrease in purchasing power. And this is why, over the course of 5 months, the French have lost almost 40% of their purchasing power in the real estate sector. Rising prices and increasing mortgage rates have seriously impacted family budgets. The average budget for a private home was 344,000 euros in 2022, which represents an 8.1% increase over the year. Considering that the average down payment in France is 50,000 euros, the cost of a mortgage has risen by 36.1% over the last 5 months of the year.

“As of the end of 2022, the real estate market has indeed split due to changes in prices, supply, and access exclusively for clients who ignore the laws of the maximum interest rate.

No mass sales of energy efficient homes. While various publications sounded the alarm in 2022 about mass sales of energy efficient homes, the Guy Hoquet l'Immobilier barometer revealed a different reality. Only 8% of properties sold in 2022 were classified as F and G for energy efficiency. This figure remained at the same level as last year. Nevertheless, there are many more in Paris, with 21.6% of properties in 2022, which corresponds to the highest growth in the whole territory, up 8.3% year-on-year. It should be noted that still 35 % of properties do not have an energy efficiency designation, although this is mandatory as of January 1, 2022.

Ultimately, properties of classes F and G are sold at a price per square meter that is 10% lower than the average price. This pricing strategy anticipates the upcoming ban on rentals and the budget for renovations needed to update the property in accordance with the Climate and Sustainability Act. Properties requiring renovation represent valuable investments for all buyers willing to undertake the necessary work, such as in Nîmes (-18% discount), Montauban (-17%), Limoges (-15%), Clermont-Ferrand (-15%), Metz (-13%), or Perpignan (-12%).

A new era of real estate is set to begin in 2023. Inflation, rising energy costs despite tariff barriers, increasing water prices... If the purchasing power of the French continues to decline, family projects in the real estate sector could suffer significantly and further deepen social inequality in access to housing. "Record transaction and price levels in the secondary real estate market over the past two years have overshadowed reality: for a significant portion of the French population, it is nearly impossible to obtain housing in major cities. The year 2023 will reveal this reality. We need to completely rethink our 'coexistence' for the next 20-30 years to build more, more inclusive, intergenerational, and environmentally respectful housing. Only then can we ensure adequate housing for the French and acceptable prices for all," concludes Stéphane Fritz, president of Guy Hoquet l’Immobilier.