The French are against the real estate market returning to its former form - Selexium | Blog

The French are against the real estate market returning to its former form - Selexium

has really turned around for the real estate market, and the reality is still hard to accept to make a difference.

The norm is not 1% rates. Rather than lamenting the 1% rates, which obviously won't be coming back, it seems more appropriate to ask how willing the French are to reconcile themselves to higher interest rates. All experts agree that historically low rates marked a particularly exceptional period, certainly far from the established norms of the real estate market.

The program Figaro Immo on Figaro TV on July 5

Two participants in the French real estate market discussed the change in the market. Guillaume Martinet and Olivier Landrevy agreed on a return to normality with a rate of 3.5%. Both colleagues,''Orpi and CAFPI presidents, correctly point out that 1% interest rates on loans have never been the norm. As for sales volume, 950,000 transactions are expected in 2023. If the symbolic one million transaction mark is not reached, the numbers will remain higher than a few years ago when annual real estate sales were around 800,000.

If the market has stalled, it is mainly because prices have still not fallen across France. Low interest rates have triggered speculation in the real estate market and now it is time to bring back the equilibrium needed for the sector to recover. Over the last 6 months, according to the latest Observatoire Interkab report from La Boite Immo, prices have fallen nationally by 0.4% and are in''an average of 3,180 euros per square meter.

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However, according to experts, only a 10% drop in prices would help restore the disturbed equilibrium, but owners have not yet realized this, and it will probably take time, according to Orpi's president. "The slowdown in activity has actually happened. Prices have come down a bit, but not enough in Paris for our clients to buy now," Guillaume Martinet said on July 5, 2023. In Paris, for example, the city that has been hit hardest by the real estate market situation, the drop in sale prices is not yet significant enough to allow those wanting to buy real estate to keep buying. Currently, 7 out of 10 buyers are postponing their plans to buy in the hope that rates or real estate prices will fall.'''As prices continue to be at the same level, the difference is made with its own contribution (approaching €90,000 in the Ile-de-France region),' said Olivier Landrevy on July 5, 2023.

Shoppers demand clarification. During their appearance on Figaro TV, the president of Orpi and the president of Cafpi gave a sound analytical assessment of the reasons for the fearfulness of the real estate market. In their opinion, motivating and communicating to future buyers that the real estate market is returning to normality and will not return to the golden age period will require the use of pedagogical techniques and convincing sellers to lower their prices. The energy implications and pressures faced by many owners are also factors cited''by these two professionals. Collective awareness seems to be one of the keys to reopen access to real estate in France.

Finally, Guillaume Martinet ends his interview by talking about the need to reopen housing, which has been so long awaited and is a necessary tool for the revitalization of real estate.

In conclusion, it is difficult for buyers to accept that they will have to borrow at 3.5% or more; President Cafpi and President Orpi expressed their views on the real estate market and explained that the rates of 1% in effect a year ago were an unusual situation; Normal interest rates are higher; Sellers must agree to reduce prices by at least 10% on average nationwide to rebalance the market.