Will the market take off again?

The rate decline continues. They could be around 3% by the end of the year. A slight improvement in a context that remains complicated.

The real estate market is in crisis, but some good news has brightened the horizon in recent weeks. First good news: the decline continues on the real estate rates side. The average rate of loans fell to 3.62% in July, compared to 4.24% in December. A slight improvement that can be explained by the breath of fresh air provided by the rate cut by the European Central Bank (ECB) in June 2024. It is the ECB that sets the tone and the banks of the eurozone and France have therefore followed. However, it could continue its monetary easing. Real estate rates could average around 3.3% by the end of the year, according to the mortgage broker CAFPI.

Second piece of good news: banks that had completely shut off the credit tap are starting to turn it back on. The number of loans jumped by almost 40% in the second quarter compared to the first, according to the Crédit Logement observatory. Of course, over a year, the situation is still down, of course the improvement is mainly benefiting wealthy households, but access to credit is becoming less difficult.

In the meantime, the drop in sales in the old sector continues. At the current rate of decline, the number of transactions could fall below the 750,000 mark at the end of the summer, worry notaries, who have not seen such a level since December 2015. Between November and the end of May alone, the number of transactions fell by almost 23%.

However, on the price side, we do not see the usual correlation between the drop in transactions and that of prices. Prices have certainly fallen, but are still too high to get the market going again. Real estate agents are complaining about this. According to them, sellers have still not integrated the new situation and are sticking to a vision of the market that is no longer at all relevant.

Another obstacle to the restart of the real estate market is the political context of June, which added uncertainty and plunged households a little more into a wait-and-see attitude. Professionals, buyers and sellers are therefore eagerly awaiting the appointment of the new government to see what the possible regulatory developments in the sector will be and to see whether or not they will embark on a real estate transaction.