your purchasing power in the 50 largest cities in France

© Illustration Capital / Freepik

The sky is clearing for future owners. According to the national real estate price barometer, published on July 1 by the SeLoger ad portal and the Meilleurs Agents estimator, household real estate purchasing power has improved in six months. Between January and July 2024, the apartments that buyers can acquire in the 50 largest cities in France are 1 square meter more spacious on average. As a reminder, real estate purchasing power refers to the number of square meters that a household can acquire with a monthly loan payment of 1,000 euros for 20 years. It has fallen by 20% in four and a half years, going from 96 square meters to 76 square meters.

The factors that determine this recent gain in purchasing power are therefore the price of property and interest rates on loans. For the first criterion, the current economic situation is not favourable to buyers since for 6 months, the French average price has still not been trending downward. It has even increased by 0.5%. “While in the first quarter, the trend in the Top 50 municipalities was down (-0.8%), it changed course at the beginning of spring (+0.8% between March and June)”notes the barometer. In Rouen, Avignon or Strasbourg, the price per square meter has even been revalued by more than 5%. Conversely, Bourges, Le Mans or Lille show decreases of between 5 and 10%.

From 1 to 5 square meters gained

Fortunately for potential buyers, at the same time, mortgage rates have fallen, allowing for gains in purchasing power in all cities. The broker Empruntis notes that, for a 20-year loan, bank rates have gone from 4.2% in January to 3.8% in July. According to the credit specialist, a borrower who pays a monthly payment of 800 euros can now borrow 134,000 euros, or 6,000 euros more than at the beginning of the year. Conversely, the mass of interest has melted, going from 64,000 to 57,500 euros.

As you can see in the table above, the biggest increase in real estate purchasing power is in Mulhouse, with 4.5 square meters of gains, ahead of Saint-Etienne (4 square meters). In these two cities, a household paying a monthly payment of 1,000 euros can become the owner of a property of more than 130 square meters. In Clermont-Ferrand, Metz or Le Havre, the drop in prices coupled with that of rates allows for a gain in surface area of ​​almost 3 square meters.

The smallest gains are ultimately to be found in the largest cities. In Rennes, Nice, or Aix-en-Provence, the price of stone has increased in 6 months, mechanically limiting surface area gains to around one square meter. A household can hope to become the owner of a property of 30 to 40 square meters. In other already very expensive cities – Paris, Lyon, Bordeaux – the drop in prices has been too small to generate large gains in purchasing power. For the trend to truly reverse, and return to its June 2022 level, the 20-year borrowing rate would have to “go back one point” or that the prices “fall by another 12%”note SeLoger and Meilleurs Agents.