It is in the premises of the Chamber of Commerce and Industry of Vaucluse, during its General Assembly, that Fnaim (National Federation of Real Estate Agents) provided an update on the Vaucluse market, finalized in July 2024 and over a rolling 12 month period. The department has a stock of 308,180 housing units, of which 6,486 have been sold. Result ? The real estate market shows a drop in volume of more than 19%. In question? Political instability, inflation, rising interest rates and the borrowing capacity of future buyers reduced by banks. However, Jonathan Le Corronc Clady announces 'A real recovery from January 2025‘, thanks, in particular, to the return of first-time buyers thrown out of the market.
“Clearly, today, we must not confuse catching up with restarting,” observes Jonathan Le Corronc Clady, president of Fnaim Vaucluse (National Federation of Real Estate Agents) and vice-president of Fnaim Région Sud. The hardest part is undoubtedly over. Real estate cycles are long and buyers' purchasing capacity has not yet been restored. The positive signals? A trend towards price stabilization correlated with the slight drop in borrowing rates. These were also above 4% for 6 months between September 2023 and February 2024, which significantly slowed down the real estate market. This experienced a slight catch-up in the spring and summer with a proportion of buyers who postponed their projects in order to take advantage of lower rates, as for example may have been the case for a couple welcoming a child who postponed their purchasing, unable to bring himself to lose 25% of his purchasing capacity.”
No real recovery before 2025
“The real recovery will not take place before 2025. The market will reach its full dynamism when first-time buyers have regained greater purchasing capacity. This was strongly impacted by the rise in interest rates and political instability was penalizing, which caused a certain wait-and-see attitude.”
Credit production divided by 3 in 2 years
“Credit production has been divided by three in two years, suffering from the drop in sales of old properties and the fall in new properties. It has been recovering for several months but remains half as high as at its highest levels. This recent development could be a sign of future stabilization of sales. The still relatively low level of new credit production is reflected in the decline in outstandings. Moreover, the repayment of the loans remains higher than the monthly payments of the new loans.”
Stabilization of sales
“We are at a low level of stabilization in sales. Nationally, at the end of June 2024, 792,000 sales had been made over 12 months. It is -21% over one year and -31% over three years. This drop in sales concerns all territories. The decline in activity, however, continues slowly with a slight decline in recent months. A stagnation which is expected to continue over the coming months.”
The fall in goods prices does not compensate for the rise in rates
“Generally speaking, the fall in prices does not compensate for the rise in rates, even taking into account the relative increase in income over the last two years. The purchasing capacity of buyers will recover in 2024 under the effect of rising incomes and falling prices coupled with a slight drop in rates, but this will undoubtedly be insufficient for a lasting recovery before 2025. However, we are on the right track to move from crisis to recovery.”
25% borrowing capacity lost for two years
“We are already catching up and restarting volumes. The banks want to lend and the French are returning to purchasing, we can sense it. They put their projects on hold for two years, because of the rise in credit rates – they had lost up to 25% of borrowing capacity – they will not wait any longer. This also contributed to the housing crisis.”
“We are already catching up and restarting volumes. The banks want to lend and the French are returning to purchasing, we can sense it. They put their projects on hold for two years, because of the rise in credit rates – they had lost up to 25% of borrowing capacity – they will not wait any longer. This also contributed to the housing crisis.”
Prices falling in all territories
“We are observing that prices are falling in all territories. The volume of sales is down -19.4% in the Sud-Paca region, compared to last year, -19.7% in Vaucluse on a stock of 308,000 housing units (excluding premises and businesses), i.e. 6 846 homes sold, compared to 10 to 12,000 property sales in certain years. The last good real estate year? 2022! A record year with 1.2 million property sales in France and around 12,000 transactions in Vaucluse.”
The top 20 towns in the department
“Avignon comes in first, representing nearly 20% of sales in Vaucluse with its 1,290 property sales. Prices have increased over the last 5 years by 18.9% while prices have only fallen by 0.4% over one year. For what ? Because rates fell in the spring, sellers did not want to lower their selling price. The drop in prices was therefore not what one might have expected. However, this would restore the purchasing capacity of buyers.”
A buyers' market
“We are therefore in a buyers' market where we should not hesitate to negotiate and especially to return to see the banks because rates are falling. The shooting window to take? Rates should continue to fall in 2025. We are currently on rates ranging from 3 to 3.60% depending on the profile compared to 4 to 4.5% last year at the same time. We should reach 3% next January.”
Vaucluse in relation to the region
Vaucluse is rather protected compared to the region. Prices fell in one year in the region by 1.2%, compared to -0.4% in Vaucluse. We observed that over the last quarter, while rates fell, prices rose. As for rents, they increase by +4.5% over 5 years and +3% over 1 year.”
Energy performance diagnostics
“Almost 40% of housing in France is thermal sieve, Vaucluse is no exception, which accounts for 37%. A shift in the Climate and Resilience Law is therefore still expected according to the latest statements from the Barnier government and the Minister of Housing, Valérie Létard.”
Vauclusians are satisfied with their real estate agents
“More than 95% of sellers are satisfied with the work of their real estate agent, based on 2,725 customer reviews, including +350 customer reviews over one year, and compared to 92% nationally. We were judged on reception, quality of service, competence, support and value for money. Of the 6,846 sales in Vaucluse, 67% went through Fnaim agents.”
The next big meeting
“The Vaucluse Real Estate Conference, soon at Avignon Town Hall, coupled with wishes to the profession, on January 28, with the discovery of the real estate figures for the year 2024.”
In detail
“Everything is sold. The market does not really experience seasonality apart from niche markets or exceptional properties like Gordes, the Luberon where properties are sold from spring until October… The rest are sold all year round thanks to a clientele of active people who live and work in the department. Avignon represents 20% of the department's property sales. A property at market price is sold in three months, exactly 87 days. Downward negotiations are made to the tune of 3 to 5% of the price of the property. The property that sells the most? T3. »
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