Property Abroad
Is a real estate market recovery possible by 2024?

Is a real estate market recovery possible by 2024?

Возможен ли восстановление рынка недвижимости к 2024 году?

Will the real estate market recover?

There's a Christmas present we weren't expecting, you know like the one that usually arrives from that auntie and always turns out to be the wrong one. You tear up the paper expecting total disappointment, and then miracle, it's much better than you expected. Well, here's what happened to mortgage interest rates reported by brokers last week, they fell for the first time in two years. The mortgage rate is actually the cost of borrowing, the higher it is, the more expensive the loan and therefore the bank will lend you less money. It was the rise in these rates that stopped the market and deals this year. Currently, the average mortgage rate is 4.2% for 20 years according to Meilleurtaux. Simply put, it is four times higher than it was a year ago. As a result, the number of sales dropped 21% according to FNAIM, the federation of real estate agents. That's about 200,000 fewer sales than a year earlier.

To a recovery in the real estate market? The rate cuts are minor at the moment, but then there are positive signals. Inflation is falling every month, and that's important because mortgage rates are falling along with it. So they're certainly not going to return to the historically low levels of a year earlier, but they should at least stabilize.

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The government has also promised assistance to first-time buyers, those who are buying for the first time. Economy Minister Bruno Le Maire said on RTL this fall that there will be an expansion of the zero-interest mortgage program. The state takes over part of the interest on the loan, thanks to this program you can save up to 30,000 euros, even the middle class has the opportunity to take advantage of this program, it can make the difference and make the application financed for the bank.

The price drop

Another way to unlock the market is to drop prices. And it has happened: already down 2-3%. We are, for example, back to the symbolic mark of 10,000 euros per square meter on average in Paris, but most importantly, industry professionals are unanimous: this decline will continue and even accelerate in 2024. We should expect another 5-6% additional decline. For unheated buildings, this can even be as high as a 15% price reduction. The market is regulated.

Trouble with new buildings

It is not all smooth sailing, for example, the new-build sector has had serious problems because the prices of these apartments continue to rise. Because of the cost of labor and materials, work stops. The problem is that if these construction projects don't resume, real estate will later suffer for it. There is also a problem with energy efficient renovations, by law from the end of next year it will be illegal to rent insufficiently insulated properties. However, judging by the opinion of notaries, real estate agents, brokers and especially French people who dream of buying their own homes, the coming year is likely to be much calmer than the closing year.

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