“It seems that the worst is behind us”: The very gradual awakening of the real estate market

And three! By lowering the key rates of the European Central Bank (ECB) by a quarter of a point on October 17, for the third time after June and September, Christine Lagarde wanted to send a strong signal to the European economy. A decision which follows the decline in inflation, falling for the first time, in more than three years, below the 2% target set by the ECB, to 1.7% according to Eurostat, and the risk of a slowdown in growth. And which arrived faster than expected, because it was scheduled for December. For the French real estate market, this is good news which confirms the downward trend in credit rates. “We estimate that interest rates could approach 3% on average in the coming months,” estimates Maël Bernier, communications director and spokesperson for the broker Meilleurtaux.

Enough to fuel the acquisition projects blocked until now and help to stop the paralysis of the market. In fact, the surge in rates, from 1.03% in October 2021 to 4.21% in November 2023, on average excluding insurance and all loan durations combined, according to the Housing Credit Observatory/CSA, had caused a fall the volume of transactions from 1.2 million in old properties in 2021 to 875,000 in 2023 according to the National Real Estate Federation (Fnaim). “In 2024, the market is expected to record around 760,000 sales”estimates Loïc Cantin, president of this organization. At the same time, banks stopped lending: “The contraction was very violent, with a 56% drop in credit production compared to the 2022 peak”confirms Pierre Chapon, co-founder of the broker Pretto.

But since the start of the year, the rates charged have been gradually falling, and fell to 3.54% on average in September. “Above all, banks are today quite willing to grant credit and even bridge loans,” supports Brice Cardi, CEO of L’Adresse. Enough to restore real estate purchasing power to borrowers: “It seems that the worst is behind us, both in terms of activity but also in terms of prices,” indicates Thomas Lefebvre, scientific vice-president of SeLoger-MeilleursAgents.

Added to this are the drop in housing prices, which began at the start of 2022, and the rise in household income, in the wake of inflation. “In one year, between falling rates and prices, real estate purchasing power has increased in all cities, but to varying degrees: from 2 to 12 m² in absolute value, but from 7 to 28% in relative value , calculates Julie Bachet, general director of Vousfinancer. In five cities, Le Mans, Villeurbanne, Grenoble, Lyon and Nantes, it jumped by more than 20%, because their prices fell at the same time by 6 to 12%. » This analysis clearly reflects the geographic disparities noted by our journalists everywhere in France.

After several months of rising credit rates, the grip is gradually loosening. But prices are still falling and the construction of new housing has collapsed due to a lack of loans granted to first-time buyers and investors. Credit: Challenges

But other factors come into play in this start of recovery. On the one hand, we must take into account the housing itself, its typology and its quality. “In every crisis, we go back to basics, recalls Laurent Demeure, CEO of Coldwell Banker France & Monaco. Buyers have the choice and compare. They are therefore very attentive to the quality of the property and punish the slightest defect. » Today, one of the main penalizing points is the energy label of the property, obtained at the end of the energy performance diagnosis (DPE), and which conditions the rental for investors (prohibition for properties rated G at 1^is January 2025, for F on the 1st^is January 2028 and for E on the 1st^is January 2034). In this case, prices are negotiated by 10 to 15%, or even more depending on the amount of work to be planned.

“There may be good opportunities among thermal strainers for those who are willing to undertake work,” supports Eric Allouche, executive director of the Era network. But be careful: “These acquisitions are also more difficult to finance and require quotes for the future project to be presented”warns Alexis Godard, president of Exell Crédit.

At the opposite end of the spectrum, despite a certain slowdown in transactions, private mansions and other Parisian pied-à-terres, or even splendid villas, from the Breton coasts to the Riviera, continue to frighten foreign buyers: “With its image reinforced by the successful holding of the Olympic Games, and despite fiscal instability, France still attracts wealthy clients, who are primarily looking for turnkey properties, completely renovated and decorated, ready to live in immediately, remarque Alexander Kraft, prési­dent de Sotheby’s International Realty France & Monaco. Although awaiting their electoral results, the Americans in particular continue to visit and even make offers. »

On the other hand, the profile of the buyers must be taken into consideration. The rise in rates has mechanically ousted first-time buyers, while the standards of the High Financial Stability Council (HCSF), with the ceiling rule of 35% maximum debt, have excluded a good number of investors, “gone from 50% to 25% of reservations”, indicates David Chouraqui, deputy general manager of Crédit agricole Immobilier. This is particularly what contributed to the collapse of the new home market, especially since the Pinel tax exemption system ends on December 31 and will not be replaced. According to the latest figures published by the Ministry of Ecological Transition, at the end of September, 337,100 building permits were issued, down almost 10% and “at the lowest since at least 2015”and only 264,000 were launched for construction, down almost 20%.

Month after month, the sector is sinking deeper into crisis: “Developers, no longer able to market their housing, no longer launch new operations and, worse, withdraw programs currently being marketed, alarms Pascal Boulanger, president of the Federation of Real Estate Developers (FPI). In the second quarter of 2024, almost one in four homes was withdrawn from sale. » This collapse has two consequences: the fall in the production of social housing, since half of them are built by developers, while “25,000 jobs were destroyed in the first quarter”, regrets Olivier Salleron, president of the French Building Federation (FFB), who anticipates the elimination of 150,000 jobs in the sector by 2025, and even 300,000 full-time equivalents if counting the induced jobs.

It also gets stuck in the social park

An unprecedented level: the number of households waiting for social housing has reached 2.7 million in 2024, an increase of 100,000 applicants compared to 2023, according to the report from the Social Union for Housing (USH ). In detail, 1.8 million households are looking for their first home and 870,000 want to change: “This is increasing everywhere and in all regions, and shows how the issue of access to affordable housing remains very important”underlines Emmanuelle Cosse, president of the USH. In October, during its annual congress, the USH challenged the new Minister of Housing, Valérie Létard, recalling that social construction had reached its lowest level since 2005 in 2023. “The cost-saving measures in 2017 (cut on the turnover of social landlords, increase in VAT, reduction in APL and elimination of the APL Accession) led to a slowdown in new production”she denounced.

Moreover, popular with young households, the new house is not faring any better. At the end of July, over one year, sales in the diffuse sector (excluding housing developments) were still down by more than a third in France, to 49,300 units. That is to say a collapse of 60% compared to an annual average calculated over the reference period 2007-2023, at 126,000 sales: “Going below the threshold of 50,000 houses, we never thought we would get to that point,” deplores Grégory Monod, president of the Pôle Habitat FFB.

However, in recent weeks, a glimmer of hope has been lit. After the wait-and-see attitude linked to the dissolution and the appointment of the new government, it is the centrist Valérie Létard, a fine connoisseur of the sector, who was appointed full-time minister for Housing and Urban Renewal. And in his general policy speech, Michel Barnier announced several measures in favor of housing. Including the extension, currently being discussed in the finance bill for 2025, of the zero-rate loan for all first-time buyers throughout the country in the new sector, and its maintenance in relaxed areas in the old sector. working conditions.

“This is a very encouraging signal, which will give the market some breathing room”hopes Caroline Arnould, general director of Cafpi. Just like the relaxations of the energy performance diagnosis, still unknown, but which could allow rental to relax too.

File created with MeilleursAgents for the real estate prices used