Good news for future owners! Interest rates are gradually decreasing, providing favorable grounds for property purchases. Find out how to seize the best opportunities according to our expert, François Sorbier.
Recently, due to very high interest rates, real estate sales were on hold, and many owners were struggling to complete their sale. Indeed, on the real estate market, figures fluctuate, and investors preferred to wait until the situation returned more or less to normal before starting their visits for a real estate purchase project. But good news, “interest rates have fallen slightly. 6 months ago, for a 25-year loan, these were between 4.4% and 4.5%, today they are more between 3.7% and 3.9%. We hope, by the end of the year, to be around 3%.” believes François Sorbier, co-founder of Valuo and expert in valuation of real estate, which lifts the veil on the current trend and the developments to be expected. So when is the best time to buy?
Although these rates remain relatively high, the housing sector is now experiencing a certain stability compared to past years. This is why banks are currently less cautious about granting loans and are letting go. Valuo co-founder says : “At the time, the banks did not know how the situation was likely to evolve and refused more than one in two loans. From now on, the constancy of the market means that they are in a better dynamic and grant loans more easily .”
This flexibility noted among bankers is not the only consequence of the reduction in rates. Real estate prices have also evolved. “Following the increase in rates a few months ago, the market has readjusted. Owners have significantly lowered their sales prices. For example, in Paris, the price per square meter is now around 10,000 euros compared to 11,000 to 12,000 euros 2 years ago”, confides our expert. Thus, the period is more than favorable for real estate purchases.“At the moment, there are interesting opportunities with falling prices. We must seize them, because the market will rise again,” he explains. “Even if rates remain high today, any buyer will be able to renegotiate their rate in 2, 3 or 5 years and thus hope for a nice capital gain when prices increase in 5 to 10 years.”
According to François Sorbier, several elements must be anticipated before becoming an owner. Firstly, it is essential to be well advised: “It’s important to see a broker or banker beforehand in order to obtain a credit report, so you will be more credible in the eyes of the seller. You will also have a better chance of starting a negotiation and therefore ‘acquire the good.’ In addition, it reveals that the interest rate is not the only percentage to take into account before a purchase: “You must look at the full usury rate, that is to say the maximum legal rate that credit institutions are authorized to charge when they grant you a loan. This includes borrower insurance which can vary from 0.1% to 0.4%.” So, no bad surprises!