The French real estate market is currently experiencing a period of turbulence, marked by significant changes affecting prices and purchasing trends. A real estate investment expert shares his in-depth analysis on the developments expected in the coming months, highlighting the challenges and opportunities that lie ahead for investors and potential buyers.
Impact of interest rates on the real estate market
The rise in interest rates constitutes a key factor in the evolution of the real estate market. This increase has direct repercussions on the borrowing capacity of households, thus influencing the demand for real estate. Large metropolises, traditionally popular, could see their attractiveness diminish in the face of this new financial situation.
The consequences of this increase manifest themselves in several ways:
- Decrease in real estate purchasing power
- Extension of credit periods
- Increase in the overall cost of borrowing
- Reduction in the number of real estate transactions
This situation pushes many potential buyers to review their plans or postpone themwhich could lead to a drop in demand in certain market segments. Investors, for their part, must adapt their strategies to maintain the profitability of their real estate investments.
The following table illustrates the evolution of interest rates and its impact on monthly payments for a loan of €200,000 over 20 years:
| Interest rate | Monthly payment | Total cost of credit |
|---|---|---|
| 1,5% | 965 € | 231 600 € |
| 2,5% | 1 060 € | 254 400 € |
| 3,5% | 1 160 € | 278 400 € |
This increase in borrowing costs could lead to a rebalancing of real estate pricesparticularly in areas where they have reached peaks in recent years.
Geographical evolution of real estate attractiveness
Faced with the challenges posed by rising rates and changing lifestyles post-pandemic, we are observing a shift of interest towards peri-urban and rural areas. This trend, which began during the confinements, seems to be confirmed and could have a lasting impact on the map of real estate prices in France.
Several factors explain this phenomenon:
- The search for larger spaces and quality of life
- The development of teleworking
- Improving transport infrastructure
- More affordable prices per square meter
Well-served regions, offering a pleasant living environment while remaining relatively close to large urban centers, could see their prices rise increase in the coming months. Cities like Orléans, Tours, or Angers benefit from this new attractiveness, attracting both families and investors looking for better prospects for returns.
This geographic rebalancing could lead to a stabilization, or even a drop in prices in certain large metropolises such as Paris, Lyon or Bordeaux, while medium-sized cities and their outskirts would experience positive dynamics.
Shortage of new housing and its impact on prices
The construction of new housing in France faces numerous obstacles, contributing to a shortage that keeps prices high in certain areas. This situation results from several factors:
- Rising costs of building materials
- Stricter environmental regulations
- Difficulties in accessing land in tense areas
- Administrative complexity of real estate projects
This scarcity in the supply of new housing has direct consequences on the existing market. Indeed, faced with demand which remains sustained, particularly in attractive areas, the prices of existing goods remain at high levels, despite the uncertain economic context.
The French government and local authorities are trying to respond to this problem through various measures, such as the simplification of town planning procedures or tax incentives for construction. On the other hand, the effects of these policies will only be felt in the medium term, suggesting a persistent pressure on prices in areas where demand remains strong.
Recommendations for investors and first-time buyers
Faced with this complex and evolving context, the real estate investment advisor recommends a prudent and thoughtful approach. For investors, he recommends:
- Favor investments in dynamic medium-sized towns
- Explore opportunities on the outskirts of major cities
- Consider energy renovation projects to enhance property
- Stay attentive to regulatory and tax developments
For first-time buyers, the expert underlines the importance of adapting your projects to the current interest rate context. He advises:
- Reassess your borrowing capacity based on the new rates
- Consider alternative, potentially more affordable locations
- Do not neglect the old with potential for renovation
- Be vigilant about additional costs (notary, works, etc.)
Ultimately, the French real estate market is entering a phase of readjustment that offers both challenges and opportunities. The key lies in a detailed analysis of local trends and an adaptation of investment strategies to new market realities. Caution remains in order, but the long-term outlook for the real estate sector remains positive for those who will be able to navigate this new environment.
Hello, I'm Romain, I've been writing for the JSD for 2 years, I'm delighted to share with you my experience and my knowledge in all areas ????!
