Corinne Berec: “Currently we are between excitement and decoration. In 2023, we are coming off a very bad year in both the transaction market and the rental market. We didn’t have a very good start to 2024 indicators have been rather positive since March. Our website is seeing significant traffic, customers are returning to our agencies and requests for estimates are still active 20 % in one year. Of course, it is still a little early to draw conclusions about offers and compromises, but the momentum is there. Everything takes a little longer and that’s good. It is good for sellers to take the time to sell and for buyers to take the time to visit and then place themselves with the advice of professionals. The signals are rather positive.”
Ludovic Huzieux: “It is true that we are coming out of an extremely difficult year 2023, especially in terms of real estate loans, the drawdown is orderly 35 % in one year. Among the reasons: the number of entry barriers for access to credit, the restrictive standards of the HCSF (High Committee for Financial Stability), income fees and, of course, rising rates… Since the beginning of the year, we are seeing a fairly encouraging recovery. The main reason for thinning comes from reality all banking institutions returned to the market offering loans. After the withdrawal phase last year, all banks, national, regional and mutual, are now creditors. Brief, conditions improve and lending rates begin to decline.“
Price drop
Corinne Berec: “That the market is uneven by geographic areas. Prices continue to fall. We needed this drop, values had risen too high and the rate level was blocking activity for several months. We are gradually witnessing a realignment of this market. What is difficult to measure is that in the numbers we do not yet have an effect on the recent improvement. We set up operations to support momentum, which results in a 120-day guarantee.”
“The drop in prices is more visible in, for example, Bordeaux and Paris, which have increased significantly in recent years. The market is still stagnant when it comes to renting. On the heat filter side, the price drops are on average in the order of 15 %.”
Average rate scenario at 3.5% by the end of the year
Ludovic Huzieux; “Interest rates are falling. The period of increase with violent intensity for more than a year (from 1 to 4%) seems to be behind us. The ascent was stopped. We witness a stabilization since December and even some modifications decrease. We are under the bar 4 % on average for a good record over 25 years (compared to 4, 5 % a few months ago).
Since all banks are lending again, there is a fairly healthy phenomenon of competition for borrowers. Which leads to downward negotiations. This is good news, especially when prices are falling. Borrowers are regaining the purchasing power of real estate. The gradual decline should continue in the second half of the year. A scenario with average rates around 3.5% is possible..
Housing policy: what measures to expect?
Corinne Berec: “Let’s give the new minister time to settle in, but I see that we haven’t had a real housing policy for many years, even though it’s the number one expenditure for the French. We need it switched on.” rental market for transactions in public and private parks. 300,000 people are sleeping on the street, which is unacceptable. 1 million 200,000 people who, according to the latest report of the Abbé Pierre Foundation, are poorly housed. This is very concerning to us. We need to rethink housing policy. Social housing, intermediate housing yes, but we also have to build new ones. It is in everyone’s interest, especially tenants and young people, students who are facing terrible difficulties in finding accommodation. We need an incentive tax policy to revive the industry and stop stigmatizing landlordsinvestors who are trying to save for retirement and make it possible to have housing on the market.”
Ludovic Huzieux: we should already adapt to developments and reform the attrition rate. What is still a barrier to access to credit today is that 35 % of the maximum debt dictated by HCSF from income charges is the standard. However, banks can deviate from this only in 20 % of cases.
To restart the activity, we should either deviate a little from this 20% to have more flexibility either consider the rest of your life, if it is convenient. It is also availablethe maximum duration of the loan which is fixed at 25 years in the old and 27 years in the new and which it can be extended if necessary especially for first time buyer. It would also be necessary extend the extension of the loan with zero interest especially for individual house and are not limited to mass housing in new buildings. Especially since the family home remains the number one dream for 7 out of 10 French people.
