Rising rates, disparate price trends, new borrowing conditions, a wait-and-see attitude…Stéphane Fritz, Chairman of Guy Hoquet and Fabien Neufinck, Deputy CEO of Crédit Logement, take stock and deliver their indicators in the Figaro Immo program on Figaro TV.
Will the slowdown in activity continue?
Stéphane Fritz, Guy Hiccups: “There is no upheaval in this back-to-school season. On the business side, it is a question of bringing the market up to standard which has been artificially boosted in recent years by low rates and the conditions of lending. A market also boosted by unfortunate events such as COVID. It went from 900,000 transactions to 1 million 200,000. We will return to a volume of 900,000 in 2023, which is in fact in line with clic demographics and mutations. On the other hand, there is a real bad housing. We are witnessing more of a housing crisis than a real estate crisis, even if many branch closures are expected. We are heading towards a housing shortage. The supply is becoming scarce with fewer and fewer transactions.”
Fabien Neufinck, Crédit Logement: “The market tension dates from the summer of 2022. With the restrictions on the granting of loans for banks that need to earn money, we have gone from a problem of supply to a problem demand. When you embark on a real estate investment, trust is essential.”
THE wear rate went to 5, 56 % since September 1 for 25-year loans. 66 % of borrowers are on durations between 20 And 25 years.
The wait-and-see attitude of buyers and sellers
Stéphane Fritz: “There is a certain wait-and-see attitude. A wait-and-see attitude of sellers but also of buyers. The latter do not necessarily wait for it to drop. They do not want to do bad business. There is a wait-and-see attitude that freezes transactions.
If there is a stall in some regions, others are resisting or even progressing. There is an imbalance with the coast, the Côte d’Azur, the Atlantic coast which are doing well and are still very attractive. Other cities such as Bordeaux or Poitiers, which had experienced great upturns, are suffering more today.
Rising rates do not compensate for falling prices
Fabien Neufinck: “We are on a decline in credit production of less 50 %. Solvency is deteriorating and there are no significant enough corrections on the costs to compensate for rising interest rates.
On a home loan of 200,000 euros between a rate at 1% and a rate at 3, 80 % this corresponds to a deadline for a household that increases by 30 %. That is to say, to have a similar effort, the household can only borrow 155,000 euros. It is a decrease of 20 % at the level of borrowing capacity.”
We are seeing a drop in the amount of transactions. Buyers buy less m2 or move away from their life project in the second or even third Ile-de-France crown, for example.
The outlook: further rate hikes to come
Fabien Neufinck: “The cycle of interest rate hikes is not completely over. The worst is over but we can expect further increases. One or two episodes of interest rate hikes. In the meantime , it would probably be necessary to loosen the standards a little HCSF. There is material to introduce reductions, and to take into account the notions of remainder to live in the granting criteria.
Build housing
Stpéhane Fritz: “the market for rental is in pain with 50 % more requests and 30 % less offers. Under these conditions, prices will not fall. Apart from those who have a life project, we advise others to wait before putting their property up for sale. If we really want to bring down prices in the long term, stimulate the real estate market, it is absolutely necessary to encourage the construction of housing.
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Olivier Marin Chief Editor at Figaro Immobilier