Real Estate Report 2022: A market in decline

Real Estate Report 2022: A market in decline
Real Estate Report 2022: A market in decline

After the madness of 2021, the real estate market appears to be stabilizing. Since the beginning of 2022, in the face of the global economic context, the trend in the sector has shown a lack of dynamism, according to the latest property price metric from Meilleurs Agents.

Stable real estate prices in most major cities

The real estate market had a relatively shy month in June, as evidenced by the latest price metric revealed by Meilleurs Agents, which specializes in online property appraisals. Most of the major French cities (including the capital) saw their prices stable except for Montpellier, which recorded Slight decrease of -0.3%. Prices in Bordeaux, Toulouse and Nantes have not really changed. In relation to other capitals, prices are slightly shaken. This is the case for Paris and Rennes (+0.1%) as well as Lyon (+0.4%). Nice and Lille show roughly similar prices (+0.5%), which is not exceptional pressure upside. Marseille has only recorded a slight increase of +1% since the last barometer, a +6.1% increase in one year. In Marseille, the rate of growth in real estate prices has been six times faster than in Lyon and Nantes (+1.1%) over the past 12 months. While in Paris, in the same period, prices fell by -2%.

Slowdown in the real estate market in the first half of 2022

The market in June was lackluster and reported a general slowdown in the real estate sector since the start of 2022, Meilleurs Agents notes. While prices in the French market increased by +2.5% in 2018 and +3.4% in 2019 and 2020 respectively during the first six months, They only increased +1.7% over the same period in 2022. As a reminder, the sector in 2021 showed record dynamism after Covid, as 1.2 million transactions were recorded in the old sector throughout the year, and prices (+ 3.8%) increased from the first half of the year. The growth rate of the real estate market in 2022 is sharply contrasted by comparison. The increase observed in the 50 largest conglomerates during the first six months of the year (+1.6%) is more than double the increase that occurred in 2021.

Tighter credit conditions weigh on the market

While the pace of growth is relatively steady, demand is not weakening. Thus, in the capital and in the vast majority of municipalities in the top ten, The real estate stress index is around 20%.. The index increased by an average of three points in France’s largest city, in just one quarter. In this context, there are still concerns that inflationary pressure and higher borrowing rates will affect household buying intentions. Project leaders should already prepare for the rate hike announced in the second half. The Governor of the Bank of France has already announced that the latter could reach 3%. A position that makes the support of a credit professional essential to the success of a real estate project. An experienced broker allows optimizing credit application and negotiating the best financing solutions for the borrower.

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