With the combined effect of the new DPE (Diagnostic Energy Performance) and rising interest rates, the real estate market should slow down. According to BPCE Group, the decline in sales of older homes will reach 5% in 2022.
Change in trend in the real estate market: Old property sales are supposed to decline in 2022 and 2023, according to BPCE forecasts. The banking group also estimates that this slowdown in the real estate market could result in 2022 Decrease in sales by 5% to 1,119,000 and 8.6% in 2023, or 1,023,000. The decline was not surprising, notes Alan Torgman, director of the study and forecasting division at the BPCE group. In fact, even if the slowdown is to be emphasized, the number of transactions exceeds one million, a level that is still high. Since 2014, real estate sales have increased steadily, with the exception of 2020, which was marked by the health crisis and the sudden cessation of real estate activity.
What is the possible reason for this reversal? There are many of them, but this trend is partly due to the high interest rates in the market that started at the beginning of 2022. The rise is also supposed to continue in 2023 and the general effective rate of loans for 20 years and more. could reach 3.5% next year, According to the BPCE teams. As a reminder, these rates were the ones applied in 2014. “This rise in rates will have an impact on purchasing power”says Alan Turjman. This rise in interest rates marks a break that puts an end to the period in which they reached historical lows while real estate prices continued to rise with extended loan tenures. Higher interest rates while inflationary pressure weighs on household purchasing power may cause purchasing intentions to decline. To take advantage of the current prices, it is more necessary than ever to file a solid. With the support and knowledge of the credit broker, the borrower makes use of his experience to negotiate the best rates in the shortest possible time, especially during the summer period when the time is extended due to manpower holidays.
Another major component could also be responsible for this slowdown: the new DPE. In fact, with Climate and Flexibility Law, energy renewal becomes mandatory and imposed, starting from 1Verse September 2022 Energy audit of the most energy-intensive homes. Thus, rentals of non-refurbished housing classified as G will be banned in 2025. Properties classified as F will be affected by this ban in 2028. The review conducted will allow for the identification of energy work to be carried out at a cost estimate in order to reach at least Class E. Some lessors who do not have the financial means to do renovations are forced to sell at a loss. Indeed, in the event of a bad DPE with an estimate of the cost of the work, the buyer takes advantage of a margin to negotiate a discount. The impact of DPE, combined with higher interest rates, is expected to lower home prices by 3% in 2023.