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Real estate: price drop in the former in the first quarter, a first since 2015

2023-05-30T11:02:09.264Z

Highlights: Real estate is suffering from the rapid rise in interest rates, which heavily penalizes households that have to borrow to acquire a property. Prices over one year are now down in Ile-de-France (-0.6%), while they are still rising in the provinces (+3.9%) despite a pronounced deceleration. The number of transactions over 12 months is estimated at 1.07 million, down sharply from the previous quarter (1.12 million) but still well above the historical average.


House prices are falling faster than apartment prices. Among other reasons, some people find that this ty


The prices of old real estate fell by 0.2% in the 1st quarter, according to the Notaires-INSEE index which references. This was the first quarter-over-quarter decline since June 2015. The notaries' index, based on sales definitively concluded, reflects market trends a few weeks late, but it is the most comprehensive indicator.

Over one year, prices increased by 2.7%, a very clear deceleration compared to the end of 2022 (4.6%), notably driven by houses. These continue to grow faster than apartments (+3.1% against +2.2%), as has been the case since 2020, but the gap is closing rapidly compared to previous quarters. Moreover, in the first quarter of 2023 alone, the trend was reversed: the price of houses fell more than that of apartments (-0.3% against -0.1%).

In a context of inflation, real estate is suffering from the rapid rise in interest rates, which heavily penalizes households that have to borrow to acquire a property. Prices over one year are now down in Ile-de-France (-0.6%), while they are still rising in the provinces (+3.9%) despite a pronounced deceleration. The number of transactions over 12 months is estimated at 1.07 million, down sharply from the previous quarter (1.12 million) but still well above the historical average.

Pay more or reduce the surface area

"The real estate market seems to have entered a new era, with interest rates increasingly strong," said Elodie Frémont, president of the statistical commission of the Notaires du Grand Paris. "So it's a real shock that is suffered in this quarter," she says. Loïc Cantin, president of the National Real Estate Federation (Fnaim), believes that this is a reversal in the possibilities of household acquisition "This is the first reversal of the trend, which is a strong marker of the impact of the reduction in the borrowing capacity of all French households in the face of the acquisition of real estate. " "The first-time buyer, he is there, there is a need for housing, but he must now make a choice": pay more or make sacrifices on the surface, details Elodie Frémont. Notaries also point out that those who are refused a loan are always numerous according to notaries.

"The structural lack of housing and low credit rates is why prices have multiplied by 2.5 in 20 years. There, we feel that this is the end of this phase, "comments Corinne Jolly, president of Particulier à Particulier. This lack is not likely to be absorbed, new construction being broken, with a drop in the first quarter of bookings with developers (-41% over one year) and building permits (-11.5%).

The problem of "thermal sieves"

The Notaires du Grand Paris forecast that the annual decline in prices should increase in the second quarter, approaching, for the Ile-de-France, 5% for apartments and 3% for houses. "People realize that the house was not for them," says Corinne Jolly. "They are moving a little away from the postcard image that there was at the end of confinement. "

Environmental regulations, which will gradually prohibit the rental of thermal strainers, are also beginning to have effects on sales, note notaries. In Ile-de-France, the share of housing classified G (the worst label) in transactions tripled between 2021 and 2022 for apartments (2.7 to 7.9%) and doubled for houses (3.6 to 8.5%), according to data from notaries. In the coming months, "there could be a two-speed market," imagines Corinne Jolly, "with an influx of offers of thermal strainers because of sellers who do not know what to do with them".

Source: leparis

All news articles on 2023-05-30

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