Between galloping inflation, energy crisis and a dragging international conflict, the traditional exercise of twelve-month real estate projections undertaken by Meilleurs Agents at each start of the school year appears to be particularly delicate this year.
Despite this very particular context, however, the stone price estimation specialist’s market forecasts for next year appear quite positive. According to its “central” scenario, Meilleurs Agents does not foresee a collapse in prices per square meter, but rather a lull after two years marked by the Covid effect, which will have mainly benefited medium-sized towns and rural areas.
Decline in sales volumes
Assuming inflation above 4%, an unemployment rate that would stabilize below 8% and a drop in credit production of less than 20% – “ it seems quite obvious that the real estate market should experience a slowdown in terms of prices and transaction volumes compared to previous years “says Thomas Lefebvre, scientific director of Meilleurs Agents and SeLoger.
Thus over the next twelve months (September 2022-September 2023), the French market should record a price increase of 3% on average – with strong disparities depending on the territory – and the volume of transactions will fall below one million, to 950,000, after 1.1 million estimated sales for the year 2022.
According to the platform, the ten largest cities in France should see their prices increase by 1%. In the lot, those of Paris should fall by 3%, those of Lyon by 2%, those of Bordeaux and Toulouse to settle by 1%, while in Marseille – where prices have exploded by almost 20% in two years – the increase should be limited to +4%. In Montpellier, a city which has also experienced spectacular inflation since the Covid – prices should increase by 3% after +5.7% in 2022. For Nice, Strasbourg, Rennes, and Nantes, it would be +2%.
A still sustained increase in rural areas
On the scale of the 50 most important national municipalities, the increase should be a little more pronounced, by 3% on average. Finally, for rural areas, prices are expected to rise by another 5%.
In the endthe evolution of the French real estate market in 2023 should still reflect – but in a subdued way – the trajectory observed over the past two years: on the one hand, a drop in prices in urban areas, which are also the most unaffordable and de facto most affected by the tightening of the conditions for granting mortgages. On the other hand, catch-up effect in the most affordable towns and in the countryside.
” The market will therefore remain in this post-Covid hierarchy with medium-sized cities that will grow faster than the largest French agglomerations. Rural areas will be, following this same dynamic, more preserved “says Best Agents.
What about the rise in mortgage rates?
So much for the main scenario, considering that the platform is still quite optimistic in terms of borrowers’ access to credit, a cardinal element of real estate demand, and therefore of price trends. According to his calculations, the rise in mortgage rates, which could reach 2.75% by the end of the year, would have little impact on the household investment rate, which is the legal maximum debt threshold.
Today, the requests are in fact mainly restrained by another legal criterion, that of the wear rate, which is the maximum legal rate, all costs included, that the banks can grant to their customers. Asked about this point, Thomas Lefebvre considers that “ the blocking of the rate of wear is temporary “. Insofar as this is expected to increase in the coming quarters, “ the situation of borrowers should improve in parallel “, he anticipates. This opinion is far from shared.
Brokers, in particular, have been warning for several weeks about the difficulties of candidates for accession because of the wear rate. They stress in particular that the rise in the usury rate will have difficulty catching up with that of interest rates, which should continue in parallel. Faced with this phenomenon, banking institutions should still make efforts to meet their marketing objectives. The use of variable rate loans, for example, has thus resurfaced.