The end of rising interest rates: will real estate come out of the crisis?

The exploration of major interest rates in the eurozone is complete, according to Bank of France Governor Francois Villeroy Gallo, and he suggests that there is no longer a need for further increases in European monetary policy.

After 10 consecutive interest rate hikes since the spring of 2022, they have reached 4% and 4.75%, historic highs since the creation of the single European currency in 1999. For the governor of the Bank of France, such a bid means that "interest rate hikes are complete".

If this turn of events is confirmed in the coming months, it could bring relief to families looking to buy or sell real estate. In turn, the halt in interest rate rises should' 'mechanically allow loan interest rates to stabilize and make them fixed again by 2024, perhaps as early as January.

The first collateral damage from rising interest rates has been an increase in borrowing costs from mid-2022. "A year ago, no family faced interest rates above 2.7% for 20 years. Today, 70% of applications are above 4.10% to 4.5% for 20 years," reminded Maëlle Bernier of real estate agency Meilleurtaux.com in late October.

The number of real estate transactions has fallen as a result of the credit crunch.

Stopping interest rate hikes may help improve the market, but it won't solve all the problems. Analysts say more real estate supply is needed to jump-start the market.