It had been simmering, starting to wake up for several months. This time it's for sure, the real estate market is back on track. And not only in Paris, but also in most large cities. The time for reflection and procrastination is over for buyers. Those who, because of the economic gloom, had postponed a purchase project in the hope of a future drop in prices have now taken the plunge, or are thinking about it.
And they are not the only ones. The very low level of interest rates - which no one had imagined - is creating opportunities. Households are determined to seize the window of opportunity. "Today, for those who want to expand, the cost is very low thanks to lower credit rates. We are at the bottom of the cycle and many people are saying to themselves that if they don't do it now, they will never do it," explains Laurent Demeure, president of Coldwell Banker France & Monaco.
In five years, households have gained more than 23% in purchasing power. "The drop in interest rates has a double effect. First, it makes buyers feel solvent or more solvent. Then, it reduces the returns of the life insurance, which will push savers towards the rental real estate. Some people are taking €20,000 out of their life insurance and investing in property, taking advantage of the leverage effect of the loan," notes Stéphane Theuriau, chairman of the Cogedim board of directors. First-time buyers, second-time buyers and investors all want to be part of the party and take advantage of the opportunity to take on debt at 1.5 or 2% over 15 or 20 years. 830,000 transactions were recorded by notaries over the 12 months to the end of June. A return to the good years. "This is the first time in five years that individuals think that it is the right time to buy. This time, it's not the professionals who are saying it, it's the individuals who are convinced," says Sébastien de Lafond, president of Meilleurs Agents.
For the time being, this new appetite of the French for real estate has not translated into significant price increases. It is true that the notaries estimate that prices have risen by 2.6% in one year in Paris, but there is no real sign of a boom, and the increase in prices in France is only 0.7% over one year. Buyers are not ready to buy anything at any price, even if some properties sell for the price of the mandate on the day.
It is especially in the capital that these express transactions are taking place. The fact remains that buyers are always selective and that the market makes a difference between the price of a second floor on a courtyard and that of a bright fifth floor. Which is reassuring. Laurent Vimont, president of Century 21 warns, however, "The market will remain dynamic if sellers keep their wits about them and do not anticipate a virtual price increase. "
For real estate professionals, the housing market is therefore healthy. As well in the new as in the old. It is necessary to say that the stone profits from what it is agreed to call an alignment of the planets. Buyers have been made more comfortable by the tremendous drop in interest rates and, for first-time buyers, by the overhaul of the zero-rate loan (PTZ). The government schemes that have been redesigned in recent years have been done so in the right direction and are now effective, whether it be the PTZ or the Pinel mechanism that encourages rental investment. Sales by developers jumped by 22.7 percent in the second half of the year (71,000 sales).
To be able to meet the demand, Alexandra François-Cuxac, president of the Federation of the real promoters (FPI), hopes besides a new hardening of the actions against the abusive recourse. "Thirty thousand homes are currently blocked by appeals," she explains. Will this increase in transactions have an effect on prices? Opinions are divided, but for the time being, developers believe that prices in the new housing market are stable, although there may be local variations. The market remains very competitive," says François Bertière, Chairman and CEO of Bouygues Immobilier, who expects the industry to sell 120,000 homes this year. In the old, "there is no sign of a speculative market" estimates, as for him, Jean-François Buet, president of the Fnaim. And 78% of real estate professionals are optimistic about housing over the next 12 months according to the Crédit Foncier/CSA barometer.
Source: Le Figaro Magazine, no. 22432 SPECIAL - REAL ESTATE, Friday, September 23, 2016
