Real estate: Landing of the market or reversal of prices?

Real estate: Landing of the market or reversal of prices?

Real estate professionals are all seeing a slowdown in price growth in 2022 and a waning of green and May cravings. What to remember from the market reports published by Century 21, ORPI, Laforêt or Meilleurs Agents.

Everyone knows the market turned around in the summer“, assured Tuesday Charles Marinakis, president of Century 21 France.

Over the whole of 2022, the average price per square meter has climbed to record levels, according to annual data from this network of agencies. These figures, however, hide a break in the middle of the year, when prices began to fall.

Other professionals observe similar trends. The forest notes ” an old real estate market in two stages“, with strong increases until July and then a calmer market thereafter. Orpi records “ a slight slowdown in price increases, particularly since September, which has a direct effect on the signing of compromises“. And according to Top Agentsprices per square meter increased by 3.6% between January and June, but only by 1% between July and December.

Rising interest rates reduce access to credit

First cause: the rapid rise in interest rates and French regulations on the usury rate, which have reduced access to credit.

The engine of the moment that stalls is creditt”, explains Thomas Lefebvre, scientific director of Top Agents. There is ” repercussions on the real estate market, especially where it is most dependent on credit, i.e. in the big cities“.

In several cities, prices, which have become very high, have thus fallen, such as in Paris, Lyon or Bordeaux, where buyers can no longer follow.

When it’s too expensive, it’s too expensive!“, summarizes Charles Marinakis, who sees this trend continuing in 2023.

The rush for houses with gardens is fading

Everyone sees the rush towards individual houses with gardens, which began at the end of confinement in 2020, fade away.

There is still an outperformance of house prices compared to apartments, but this is tending to reduce“, analyzes Thomas Lefebvre.

Laforêt even speaks of a ” back to town“, pushed by families, seniors or young workers who have moved too far away from services or employment.

We had seen the prices of houses in rural areas skyrocket because everyone wanted their garden and their individual house, but there was no reason, such as a TGV station emerging from the ground or an employment area that flourished.“, judges the president of Laforêt, Yann Jéhanno.

The cost of energy and fuels makes you think

The rise in energy and fuel prices has also, he says, made families think: a larger house is more expensive to heat and a property far from the city increases dependence on the car.

Century 21 thus predicts that to calculate the means of a household, it will soon be necessary to estimate not only the monthly loan payments, charges and taxes, but also the costs of energy and travel!

But, notes Thomas Lefebvre, “ we still have, casually, rural areas that continue to outperform, which is explained by the fact that prices remain relatively affordable in these areas“.

He believes that the return to town of families burned by energy costs is not a massive phenomenon, because it is above all low-income households who buy on the outskirts.

A trend that is worsening, at the risk of further widening inequalities.

If in some peripheral towns, the price per square meter is continuously rising, it is mainly supported by transactions on larger and often more prestigious types of property“, notes Corinne Bérec, vice-president of Orpi.

We observe the phenomenon very clearly in Île-de-France: while the first and second crowns presented great opportunities for less well-off households, there will soon be no more goods meeting the needs of the greatest number.“, she fears.