Has the real estate crisis already happened in France?

In France, real estate experts worry about a possible crash due to rising interest rates and a slowing economy, disregarding the fact that home prices have doubled in the last fifteen years.

Housing prices have continued to rise over the last twelve months, only in Paris are they on the decline. The expected crisis is dragging on.

In other countries, such as the US or Australia, the decline in house prices started from the beginning of 2022, but already seems to be complete. In Australia, house prices rose in the first three months of 2023.

In OECD countries, real estate prices rose by more than 40% between 2017 and 2022. In the US, the real estate market is rising again after several quarters of decline. Shares of construction companies rose two''times better than other securities.

French partners in Europe's real estate market appears to be stable. Analysts at JPMorgan and Goldman Sachs believe the point of the real estate crisis is over, at least for the Anglo-Saxon countries.

In OECD countries, real estate prices rose by more than 40% between 2017 and 2022. The COVID-19 crisis has led to an acceleration in price growth. Global central bank interest rates have risen by more than three percent since the beginning of 2022, raising the cost of mortgages. Rising interest rates and tighter access to mortgage credit have led to a 3 percent decline in house prices in OECD countries. In real terms, taking inflation into account, the fall is between 8 and 10 percent. This correction remains at the average level observed since the end of the nineteenth century,''but it is lower than those that occurred after a period of strong growth.

From 1990 to 1994, prices in Paris fell by more than 40 percent. A classic real estate crisis usually manifests itself as a deep drop in prices in countries where they have risen sharply as a result of speculation. In Paris, prices fell by more than 40% between 1990 and 1994. After the financial crisis, real estate prices in Ireland fell by 50%. House prices in the US lost more than 20%. In Spain, the fall reached 27% in 2008.

The decline in real estate prices over the past two years is not only due to rising interest rates. While San Francisco has seen a 10% drop in house prices, this is primarily due to the departure of some companies from the high-tech and finance sectors to Florida and Texas. Nevertheless''less, real estate values in San Francisco remain high.

The trend is worrying for the construction sector, as a decline in activity is expected over the next few years. However, in many countries it is predicted''in this. In France, the population continues to concentrate in large agglomerations and near the coast. In Australia, more than 100,000 immigrants settle each year. In Canada, arrivals to the territory exceed 200,000. In London, despite Brexit, rental values have increased by 16% in 2022 due to rising demand.

The crisis in the real estate market is slowly approaching. The rise in interest rates is not steep enough to cause a crash. Real interest rates remain negative. If wages continue to rise, the purchasing power of real estate buyers may not be as badly eroded as is thought. The real estate market in the OECD is primarily characterized by a housing shortage. Introduction of legislation as part of the fight against''Climate change is exacerbating this situation. If real estate prices start to rise again in the coming months, their disconnection from incomes will become increasingly significant, which could lead to social tensions and a real crisis.