Is this the “real estate spring”? Professionals in the sector, buyers and sellers have found a little smile in recent weeks. Speaking to L’Express, Yann Jéhanno, president of the Laforêt network, evokes a “tremor” in the real estate market in the first quarter of 2024, while the months of March and April are generally important for the sector. “The direction of the slope has changed, but it remains fragile,” he says. “The recovery is timid but it is still real. It is confirmed month by month compared to last fall, also confides Maël Bernier, spokesperson for Meilleurtaux. We have shifted into a more positive dynamic, but without euphoria .”
The framework is more favorable than in 2023 for buyers. Falling prices in certain areas, falling property loan rates, banks more inclined to lend… This good news comes with the recovery of a market that was still sluggish four months ago. The average rate for real estate loans, excluding fees and insurance, fell in February to 4.11%, according to data published by the Banque de France. For the first time since the start of 2022, the average interest rate, excluding fees and insurance, on new home loans (excluding renegotiations) is down 6 basis points (4.11% after 4.17%) .
According to figures communicated on March 5, this time by the CSA/Crédit Logement Observatory, interest rates rose from 4.24% to 3.99% between December 2023 and February 2024. “The drop in rates has a both psychological and real impact on purchasing power”, underlines Maël Bernier.
In his post on trends for the first quarter, Laforêt mentions a real estate market which “continues to adjust”, with a drop in prices (compared to the last quarter of 2023) which is confirmed at the national level, at -1.2%, now reaching 3,303 euros per square meter. “This price correction, although moderate, is a key indicator of a slight recovery in a still fragile market context,” notes the agency network cautiously. According to Orpi, in the first quarter, prices per square meter across the country fell by 3% year-on-year. For Laforêt, this decline is 4.7%; and according to Century 21, it is 3.2% for apartments and 3.3% for houses.
“Wait and see” buyers
Are buyers pushing the doors of real estate agencies further? “We had a nice resumption of activity in February. But since mid-March, there have been fewer, it’s been dead calm,” Anne Bretin Monard, director of a Guy agency, told L’Express. Hiccups in Lyon, noting “roller coasters”. The ads published by his agency are widely viewed: sometimes more than 1,100 clicks on one. The problem? This does not translate into visits. A highly viewed ad may, for example, result in only three calls or emails.
“Potential buyers are waiting and waiting. They are wondering if prices will not continue to fall subsequently, as will rates,” notes Anne Bretin Monard. The head of this agency located in Croix-Rousse distinguishes the market for houses, “ultra-calm”, from that of old apartments, where she notes “a nice recovery”. In Lyon, Place Jules Ferry, a 111 square meter apartment located on the top floor, with balcony, cellar and elevator, quickly sold for 580,000 euros. “Some properties sell very quickly but others sell very slowly, in six months,” notes Anne Bretin Monard.
On the Laforêt side, Yann Jéhanno recalls a “calm” month of January, while in February “the French reactivated their projects which had been postponed or came with new projects”. Real estate transactions “show a symbolic recovery at the national level, with a slight increase of 0.5% compared to the last quarter of 2023, marking a stabilization after a year 2023 in sharp decline”, indicates the network of agencies in its post of trends. Near L’Express, Stéphane Chemouli, commercial director of the Procivis Ouest real estate group, which offers its real estate services in various areas, purchase, sale, rental, rental management, trustee and real estate development, also notes “a shudder”. “We feel that the market is restarting,” he rejoices.
The return of the banks
If the situation is improving somewhat, it is in particular because more and more sellers understand that they must adapt to the new market situation, with falling prices in certain regions. “At the beginning of April 2024, the GAPI index from Enchères Immo (Editor’s note: which reveals almost in real time the evolution of the gap between the price expected from sellers and that offered by buyers) suggests a promising dynamic: “interest rate adjustments seem to positively influence purchasing behavior, while sellers, after a waiting period, begin to align their prices with market reality,” says Louis Du Clary, co-founder of the sales site interactive Real Estate Auctions. “Some sellers listened to us about the drop in prices,” also notes Stéphane Chemouli. At Laforêt, on the other hand, we see that “sellers stick to their positions and persist in refusing the reality of prices”. “Many owners still have the reference from 18 months ago, when prices were high,” notes Yann Jéhanno. Result: these overly greedy sellers are unable to part with their goods.
Banks are also helping to gradually unblock the market. In order to bring back buyers, sometimes deprived of access to credit for almost two years due to the rise in interest rates, some banks do not hesitate to organize events to discuss their real estate project with customers, assess their borrowing capacity and have them leave with a financing simulation. “The banks are on edge, they are competing with each other,” and borrowers and brokers alike are “spoiled for choice,” says Maël Bernier. The Meilleurtaux spokesperson compares this new situation to last year, when “it was the bottom of the pool”.
But, for certain actors, like Anne Bretin Monard, the banks are not yet “making enough effort in accepting applications”. “The last push from the banks is missing,” she says. Banking establishments are in fact always careful about the files. “You must always present a very attractive borrower profile,” says Yann Jéhanno, noting that first-time buyers are still “left on the side of the road.” At Laforêt, these represent a little more than a quarter of acquisitions (28%), second-time buyers 54%, while investors are at the origin of 18% of transactions. First-time buyers nevertheless represented more than 50% of transactions in 2019. According to the Banque de France, the amount of new home loans fell slightly in February, to 7.3 billion euros excluding renegotiations, compared to 7 .6 billion euros during the previous month. The amount has been divided by three since the peak in spring 2022, to more than 22 billion euros.
“The hardest part is over”
Maël Bernier “wants to believe that the hardest part is over”. According to her, average rates could go from 3.80% over 20 years to 3.50% next September. “I remain cautious about the future because the recovery is very cyclical. Structurally, we do not have a housing policy that will allow us to restart, we do not have a defined tax framework for investors and we do not have enough of new housing coming out of the ground”, estimates Yann Jéhanno.
The new construction sector is going through great financial difficulties. Bouygues Immobilier, a subsidiary of the eponymous group, wishes to eliminate 225 positions through a social plan, the company announced on April 8. Bouygues Immobilier is the third major developer to announce a social plan, after Nexity and Vinci Immobilier, earlier this year.
Developers and builders are caught between rising construction costs, caused by material prices and stricter environmental regulations, and the collapse in demand, caused both by difficulties in accessing credit and gradual end of tax incentive schemes. “Some people say that it’s spring for real estate. I say that it’s a swallow and, as they say, a swallow doesn’t make spring,” says Yann Jéhanno. If the clouds disperse, the sunny days are not yet here.
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