Better to be a buyer than a seller of real estate right now. After several years of euphoria where almost everything sold without difficulty at ever higher prices, the tide finally turned. Paris, Lyon, Toulouse, Rennes, Nantes, Marseille, Bordeaux saw their prices stagnate or fall by 1% to 2%. And the number of transactions drops, by 4% on average over one year, according to the March analysis of the National Federation of Real Estate (Fnaim).
Sellers who were counting on a constant price increase may be disappointed, especially if they bought when the market was at its highest.
They have also been faced for several months with another difficulty: finding solvent buyers. While a small proportion of buyers do not need to borrow to buy, the vast majority must take out bank credit. However, interest rates are rising, mechanically reducing the purchasing power of potential buyers, even hampering certain projects.
The rise in rates generates on average a loss of 15,000 to 20,000 euros in purchasing power, according to the broker Meilleurtaux. This will only represent a few square meters in a large city like Marseille or Lyon, but it will be one room less in medium-sized cities like Auxerre or Saint-Etienne.
“To compensate for these rate hikes, prices would need to fall by 15% to 20%, but sellers are not ready to make this sacrifice at this time”, notes Maël Bernier, spokesperson for Meilleurtaux. With higher rates, the risk that the purchaser does not obtain his loan is greater. Suffice to say that the seller will have to welcome with open arms a potential buyer who presents himself with the ability to buy without credit… “The seller can even, without hesitation, grant a discount on the property to this type of buyer”notes Christel Tessier, notary at C & C Notaires, a study based in Paris.
“Fix What Can Be”
This context pleads for people with a sales project to carry it out without delay. “If you’ve made up your mind, don’t wait too long, especially in cities where prices have risen a lot in recent years. This is the case of Bordeaux, where we can consider that we have reached a plateau”advises Stéphane van Huffel, managing director of Leemo, a specialist in real estate investment.
And to put the odds on his side, the seller must make an effort on the condition of the property. “It may seem obvious, but sellers don’t always realize that what’s in good condition sells better than the rest. Without doing major work, we must repair what can be repaired”recommends Alexander Kraft, CEO of Sotheby’s International Realty for France.
You have 48.79% of this article left to read. The following is for subscribers only.