The real estate sector warns of a crisis. Is the risk real? The decryption of Fanny Guinochet.
It is always difficult to predict a real estate crisis, but a turnaround, yes. After years of real estate euphoria, many signals are turning orange or even red. The first is the number of transactions, which is falling: 900,000 expected this year. This is mainly due to the difficulties that households have in obtaining their mortgage. The conditions have become much tougher and even if the usury rate, this maximum rate that the banks must not exceed when they lend you, is now calculated every month, even if it has been raised a little, a file of loan out of two is refused. According to the CSA Housing Credit Observatory, the production of loans has collapsed by 40% in one year. The French want to buy, but many are unable to obtain sufficient guarantees for the banks.
Interest rates are always rising and it is going fast. 3% on average for a loan over 20-25 years, surely 4% at the end of the year. Two years ago, we were at less than 1%. As a result, those who are already owners are reluctant to move and embark on a new loan which will be more expensive, whether for their main residence or an investment and therefore demand slows down.
On the supply side, it is also tightening because the new home market is experiencing a serious slowdown with a 25% drop in new home sales. In question: the rise in the price of materials, wood, steel, energy, building is much more expensive than before. Promoters complain of no longer covering their costs because of the regulatory standards which have become stricter. Elected officials who are reluctant to issue building permits. Result: one in five construction projects is abandoned.
The market seizes up
Prices are slowly falling. In the old, according to notaries, prices in Paris have lost 5% in one year. Elsewhere in France, rates are also settling, but not yet enough to offset the rise in rates.
In fact, both buyers and sellers play for time, or give up on their project. The market is seizing up. Professionals are asking for help from the state, real estate agents, brokers, developers, building craftsmen evoke a real social bomb and are asking for shock measures to support the sector. They expect a lot from the National Refoundation Council devoted to housing. After being postponed, it must be held on Monday June 5.