Housing. A primary need that is struggling to be satisfied in France in 2023. And the situation is not about to improve. The sector has been facing increasing constraints for several years: environmental standards, high land prices, rent controls, etc. The rise in rates has changed the situation for buyers, sellers and tenants. Our explanations and ways to break the impasse in this six-part special report.
Wait for the storm to pass, postponing your own move? Or sign death in the soul, with the feeling of selling off one’s property? There was a time, not so long ago, when sellers did not have this kind of dilemma: in a real estate market where demand exceeded supply, they made rain and shine. This prosperous period is well and truly over. Buyers are no longer rushing. And the most serious of them, crowned with a hard-won loan agreement, are no longer willing to go along without firm negotiations.
Problem: “The price reductions are too timid for the moment,” assures Me Edouard Grimond, spokesperson for the Superior Council of Notaries. Between now and the end of the year, professionals are only expecting an average decline of 1%. “It is too little to compensate for the loss of purchasing power of the French and the increase in interest rates,” estimates Stéphane Fritz, president of Guy Hoquet, which has 550 agencies throughout the country.
The awareness of the owners has not yet occurred. Many persist in maintaining the price of their apartment or house at all costs. A human reflex, all too human. “Everyone has in mind the idea that we cannot make bad deals in stone. It is absolutely necessary for real estate agents to provide comparisons. This is one of the interests of this profession,” emphasizes Philippe de Ligniville, deputy general director of Bien’ici. On this platform, the stubbornness of sellers is obvious: advertisements remain online for an average of seventy-four days, compared to fifty just eighteen months ago. “This gives an idea of the viscosity of the market,” adds the professional.
Only forced sales remain
The profile of sellers has greatly evolved. “First there are the constrained people who have no other choice but to accede to the price requested by buyers,” explains Charles Marinakis, president of Century 21 France. Couples going through a divorce or whose professional situation is changing due to a transfer or a change of position. In others, it is the children who leave the family home, the accommodation then becoming too large. “On the other hand, you have the opportunists, who are still hoping to find the “right customer”. They are now out of the race. And in the middle, you have the bulk of the troops: the uncertain sellers,” continues Charles Marinakis .
For several months, real estate agents have been on an educational assault to try, on their own scale, to unlock things. “It is obvious that sellers must review their claims, update them in relation to the market. Owners have benefited from significant capital gains over recent years. It is time for them to accept that the price of real estate is not “is no longer the same”, judges Yann Jéhanno, president of the Laforêt agency network.
Spring, summer, even fall 2024? It is difficult to say when significant drops will occur. “The market is blocked because everyone is waiting. It’s a year of transition, after fifteen years of euphoria,” wants to believe Ingrid Nappi, economist and specialist in real estate issues. “This readjustment is healthy, but it is extremely violent because it is rapid. It should continue next year, prices remaining too high and no rate revision being on the agenda,” adds Thomas Lefebvre, scientific director at Meilleurs Agents. The online valuation specialist anticipates a total of 890,000 sales this year, down 20% compared to 2022. A decline whose end no one yet dares to predict.
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