Mortgage Credit: Punishing Low Income Families -

Real estate: fewer and fewer sales, due to ever-higher prices and ever-increasing credit rates –

Despite tighter access to credit and higher real estate prices, housing prices continued to rise. Combined with the declining purchasing power of the French, this resulted in declining sales.

Like every month, LPI-Seloger(1) Revealed French real estate market trends for July 2022. Key findings: continued strong demand, and financing difficulties for borrowers who have to deal with the sharp increase in the prices of older homes.

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Medium-sized cities are more popular than big cities

The increase in property prices is fastest in cities with fewer than 60,000 residents, according to data from the LPI-Se Loger Scale. These mid-sized cities saw real estate prices rise by 9.3% over one year, while The overall increase in France is limited to 5.8%. In cities like La Roche-sur-Yon or Laval, the price hike has reached 18% in one year. Increases that do not discourage borrowers from implementing their real estate projects (mortgage, etc.), because price levels are still lower than those in urban areas.

What about these big gatherings? Although price growth is still sustainable in some Of them, such as Brest (+8.5% over one year), Lille, Marseille, Montpellier, Nancy, Nice, Paris or Rennes (about +5% over one year), retaliation is weaker in Bordeaux, Nantes or even Strasbourg (less than 2% within one year). Urban housing prices So follow the inverse curve : Prices fall year on year in Bordeaux (-5.9%), Rennes (-8.7%) and Nice (up to -11%). the reason ? It is more difficult for borrowers to get financing because of the value of these homes.

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New or old, prices are going up

LPI-Se Loger Scale Reveals A Sharp price hike in the old (+ 3.8% over the past three months), driven above all by homes (+ 4.3%, against 3.5% for apartments). As a result, the old real estate market is going through an area of ​​strong turmoil, as evidenced by its activity dropping by 22.8% in June. “Such a decline is very rare in June, and only came to light in 2008 when the sub-prime crisis erupted,” LPI-Se Loger asserts in its gauge.

This phenomenon of high prices is not unique to the first. In new buildings, the purchase cost is also rising, which is partly explained by the rise in construction costs, “rapid and rarely seen in the past,” raises LPI-Se Loger. The New home price up +5.2% over the past 3 months, to settle at 2420 euros per square metre. The increase is less for new apartments: + 2.1% over the past three months, at a square meter price of about 6,035 euros.

Transaction volume collapses

Tighter access to credit, higher interest rates, lower purchasing power, maximum usury rate of 2.60% (for loans less than 20 years old) … There are many factors that explain this Some accommodations no longer find their takers, The number of transactions decreased. An unprecedented situation, because “usually, after a quieter month in May, the old home purchases made by individuals in June rebound.”

However, this year the numbers speak for themselves: “After a very bad month in March, sales made during the first half of 2022 are down 7.4% year-over-year and up to 18.6% compared to the first half of 2019. They are then 12.5% ​​below their long-term level.” Sales volume It also varies greatly by region : “At the Midi-Pyrenees, sales therefore increased by 10%”, according to the LPI-Se Loger scale, while the decrease in sales was “by more than 15% in the Bass-Normandy, Bourgogne, Champaign-Ardennes and French Comte”.

(1) The published and signed average prices are calculated as a rolling quarterly average at the national, regional and administrative level and in towns of more than 100,000 inhabitants. In smaller areas (particularly regions), prices are on a rolling average annual basis.

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