Real estate in France: Cities most affected by rate hikes - Meilleurtaux.com
The latest real estate survey in France shows an alarming decline in purchasing power, linked to rising interest rates on loans. According to the study, published on November 20, a sum of 1,000 euros paid over 20 years allows the purchase of an average of only 53 square meters in the 209 largest cities in France, 20 square meters less than in the last 2 years.
Analysis. Double punishment from rising rates. The rise in interest rates, which started at 1% in 2019, played a crucial role in supporting the population's real estate purchasing power. However, since the surge began in 2022, borrowers have had to pay twice. On the one hand, mortgages, which now''averaging 4.12% in October 2023, are more expensive. At the same time, prices per square meter have not declined enough to offset this increase in interest, resulting in a significant reduction in real estate purchasing power.
Note. Over 22 months, real estate purchasing power has decreased by an average of 20 square meters in the French main cities. In Bordeaux and Lyon, the decrease in available space is 19% and 23% respectively over almost 2 years. In practice, new buyers in Lyon will be able to buy 8 square meters less with a payment of 1,000 euros over 20 years, while for residents of Bordeaux the number is 10 square meters.
There are notable regional differences.
26 October
Alexandra Verlhiak, an economist at Meilleurs Agents, emphasizes that negotiation remains a key strategy for buyers looking to improve their buying power.
What to remember. The rise in interest rates on loans in France has led to a significant reduction in real estate purchasing power, a decline of 20 square meters in 22 months. Interest rates have risen from 1% in 2019 to 4.12% in October 2023, doubling the cost of mortgages. Bordeaux and Lyon show declines of 19% and 23%, while some cities such as Neuilly-sur-Seine, Paris and Vincennes have limited losses to 4 square meters thanks to price reductions. Negotiations are becoming''a key strategy to rebalance loan prices and interest rates, ensuring fair access to property.
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