For several months, the real estate sector has been experiencing shocks that increasingly resemble a crisis. On both sides, frustrations are accumulating at the risk of freezing the market. On the one hand, there are buyers who are struggling to obtain a bank loan, especially as interest rates are soaring. On the other hand, sellers are also under pressure in the face of collapsing demand and, in fact, leading to a drop in market prices. “The Roaring Twenties are over, we are going to move to another real estate paradigm,” declared Elodie Frémont, president of the real estate statistical commission of the Notaries of Greater Paris, last week on the occasion of the publication of the index. Insee notaries. After seven years of incessant rise in old real estate in France, prices increased by only 0.5% in the second quarter, compared to 6.8% a year ago.
In addition, the number of transactions – an indicator of market activity, which had reached an absolute record in 2022, i.e. more than 1.2 million – continues to decline rapidly. For the whole of France, excluding Mayotte, it stood at one million. A figure still higher than the historical average, recalls INSEE in its latest report. If the period is not easy for sellers and buyers alike, three experts give L’Express five good tips for maintaining confidence in the real estate market, not postponing your projects and finding good deals.
Set the right price
Faced with dwindling demand, real estate market prices are falling. Which is not to please the sellers. “For several months we have been obliged to revise downwards many sales mandates. The economic situation imposes it on us and the interest rates of the banks are rising as well”, testifies Olivier Princivalle, president of the FNAIM (national federation of real estate) of Greater Paris. “But it is always complicated for the seller to review the price of his property: there is a psychological phase to go through, but it is necessary.”
It can be difficult to readjust to the market after years of relentless growth. This is why Eric Allouche, executive director of the ERA France real estate network, recommends calling on a professional. “He will provide advice to promote the property, but also select buyers and avoid bringing buyers who do not have the financial capacity to purchase,” he explains, adding that “the most It is important to know the price of your property and that it is consistent with the market price.
Renovate to sell better and faster
Another solution: if necessary, undertake work to present your property with a greater competitive advantage. “We must capitalize on the presentation of the property and the attraction that this can arouse in terms of maintenance, decoration and potential,” explains the president of FNAIM Grand Paris, Olivier Princivalle.
In addition, “energy renovation can also constitute a lever for sales”, assures Cécile Roquelaure, director of studies for the broker Empruntis. Indeed, since the climate and resilience law, promulgated in August 2021, the requirements in terms of energy performance have changed. And for good reason: depending on their classification, certain properties will be further devalued on the market, or may even be prohibited for rental. “Today, energy performance has become a criterion of choice for buyers, observes Olivier Princivalle. It is much more significant than before the law, especially against a backdrop of inflation and the energy crisis. In fact, buyers are more attracted by economical housing rather than energy-intensive property. “The properties that do not decline are those that have been renovated,” remarks Cécile Roquelaure. An energy renovation can be very expensive, the experts contacted by L’Express advise, if it is not feasible, to lower the price of the property accordingly.
Wait, a solution?
Given the state of the market, some sellers might want to delay, wait for the storm to pass before putting their property on the market. “Postponing your project is not necessarily a good idea, immediately indicates Olivier de Princivalle. The difficulty is that we do not really know what the state of the market will be afterwards. For the coming year and probably the year Next, it will fall further given the significant increase in interest rates which is causing borrowing capacity to fall. Despite the crisis, real estate remains a safe haven, specialists point out. “It is better to pay a loan than a rent, opines Eric Allouche. A loan is an asset that is built up, while a rent is money lost.”
Is having a contribution essential?
Banks lend less, much less. According to the latest data published by the Banque de France, credit production fell by 51.5% from May to July, compared to 2022. The total amount of new home loans granted to individuals was established to 12 billion euros last July, compared to 21.8 billion euros during the same period the previous year. “If the real estate market is seized up, it is mainly because of the absence of loans issued by banks and the increase in interest rates,” underlines Olivier Princivalle. In other words: banks only lend to those who have the means.
“Today, very few projects are financed without a contribution,” also notes Cécile de Roquelaure, who recommends future buyers to build up a nest egg. “Funding without contribution is increasingly rare and it is not certain that we will return to it. We have lived through an exceptional period.”
Renegotiate your bank insurance contract
Any saving is good, right? Know that you can do this even after you have acquired your property. Indeed, since September 1, 2022 and the Lemoine law, all borrowers, including those with a current contract, can change their borrower insurance contract at any time, without waiting for their first year of contract. “We strongly recommend doing so,” agrees Olivier Princivalle. “The tendency of banks is to catch up on these contracts after having granted low interest rates, but their contract proposals are not necessarily competitive.” According to experts, the contract rating can be halved, and thus generate a profit. “We often talk about several thousand euros over ten or twenty years,” adds the president of FNAIM Grand Paris.
Cécile Roquelaure also recalls that “each performance is questionable”. “The credit rate can also be negotiated and you should not be afraid to put offers in competition because the highest rates are around 5% and the lowest just below 4%. This means that it There’s space.”