“The landing we are experiencing today can only be the consequence of extraordinary years. » On the occasion of the assessment of the year 2022 of notaries, presented Thursday, December 15, Edouard Grimond, spokesperson for the office of the High Council of Notaries, noted a decline in the number of transactions in old housing, while volumes sales had peaked in 2021 (with more than 1.2 million sales at the end of September 2021, over 12 rolling months) driven by historically low interest rates. “Volumes have begun their slow decline, suggesting an end of the year slightly below 1.1 million sales, which remains exceptionally high”nuanced Mr. Grimond.
Since the peak of 2021, the economic environment has been disrupted in Europe. Mortgage rates for individuals have started a rapid rise, rising from 1.03% in October 2021 to 2.09% in October 2022, according to the Observatoire Crédit Logement CSA. The sharp surge in inflation since the start of 2022, reinforced by the war in Ukraine, then the European Central Bank’s decision to raise its key rates have caused this upward movement, which is limiting household debt margins.
“Signals call for vigilance”adds the notary: longer sales times and an offer of goods for sale which “is slowly dwindling, as is the number of pre-contracts”. A “degradation to be directly correlated with the rise in inflation”, which affects the purchasing power of the French.
“A new round”
Less favorable buying conditions and a slight decline in transactions will not remain without an effect on prices. While they reached record levels this summer, the increases are now less marked. According to statistics from notaries, the prices of old apartments increased by 4% in the third quarter of 2022, over one year (+ 7.1% in the provinces, + 0.2% in Ile-de-France), but they do not grew only slightly, by 0.9%, compared to the second quarter of 2022.
The real estate data aggregator Meilleurs Agents, which has more recent figures, even notes on its side “a new cycle, made up of slight price drops since the start of the school year in the major cities of France”, underlines its scientific director, Thomas Lefebvre. According to the platform, prices would have fallen by 1% in Paris in December over 12 months, and they have been falling since October in Lyon (-0.6%), Toulouse (-1%), Nice (- 0.3%), Nantes (-0.1%), Strasbourg (-2.3%), Montpellier (-0.3%), Bordeaux (-1.9%) and Rennes (-2.1%) .
As prices evolve in dispersed order across France, data from the Higher Council of Notaries makes it possible to measure the attractiveness of territories, by displaying the prices per median square meter of old apartments in the main municipalities. At the bottom of the ranking is Saint-Etienne with a median price per m² of 1,170 euros.
On average, by going into debt over twenty years, with a monthly payment of up to a third of their disposable income, households can now acquire a home of 80 square meters, or 4 m2 less than in 2021
“Despite the annual increases, prices [y] remain below those recorded before the 2007-2008 crisis”, says the study. Paris comes out on top, at 10,590 euros, but remains the only one of the 18 cities studied to record a slight drop in its median price per m² (–1%) over one year. Over a period of five years, comparing prices between 2017 and 2022, four cities have experienced a surge of more than 35%: Strasbourg (+ 37%), Lyon (+ 43%), Nantes (+ 46%) and Rennes (+59%).
Finally, the cumulative effect of prices that are still very high and the rise in interest rates has caused a fall in the purchasing power of real estate for the French in 2022. On average, by going into debt over twenty years, with a monthly payment of up to a third of their disposable income, households can now buy an 80 square meter home, i.e. 4 m2 less than in 2021, according to the calculations of the High Council of Notaries. Such a fall had not been observed for more than ten years.
Effect of energy-intensive labels on prices
In 2022, notaries also took an interest in the energy quality of properties put up for sale. Their data reveals that “thermal strainers” (housings labeled “F” or “G”) accounted for 17% of closed sales in the third quarter of 2022, up from 11% a year earlier.
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The Climate and Resilience Law, which will gradually prohibit rental of this type of housing – from 1er January 2023 for some of the goods labeled “G” (the most energy-consuming), then all goods classified “G” in 2025, “F” in 2028 and “E” in 2034 – “was able to accelerate the decision to sell”, notes the Superior Council of Notaries. Sell rather than undertake energy renovation work?
However, in a study on “The green value of housing in 2021”, published in November, notaries found that the effect of a very energy-intensive (FG) label on prices was not insignificant, “more significant in houses (from – 3% to – 19%) than in apartments (from – 2% to – 11%)”.