Real estate: turmoil that may affect the real estate market in 2023

Real estate: turmoil that may affect the real estate market in 2023
Real estate: turmoil that may affect the real estate market in 2023

In 2023, the real estate market activity faces new challenges after a long period of low interest rates. BPCE warns that inflationary pressures, higher rates or the cost imposed by renewable energy could affect the sector.

French families face inflation

Becoming a landlord has always been the dream of the French, especially since real estate is still a safe haven. However, the inflationary shock worries French households who could be more “vigilant” in their property purchase plans, BPCE Group warned in its 2023 residential property outlook.

Furthermore, the BPCE/Audirep Savings and Investments Scale indicates that Only 21% of the French consider it the right time to buy, compared to 27% in April 2020 At the height of the health crisis. In practice, first-time buyers, i.e. young and low-income people, are the most likely to put off their projects.

These households, which are more vulnerable to a return of inflation, have to contend with a decline in their purchasing power. Additionally, as explained by Alan Torgman, Director of Studies and Forecasting at BPCE Group, the share of households with a takeover project has remained flat at 18% of the population since November 2021.

Rising real estate prices or the beginning of normalization?

The rise in mortgage rates since the beginning of 2022 has been remarkable The end of a long period of decline For mortgage applicants. Alan Torgman believes that this rate hike along with the tightening of credit conditions by the High Committee for Financial Stability (HCSF) may force some families to reconsider their purchasing plan.

With the rise in OAT, credit rates should be Nearly 3.5% over 20 years at the end of 2022. It should be noted, however, that higher interest rates should automatically cause real estate prices to fall. In addition, mortgage loan production remains active and “still benefits from favorable rates,” the economist notes. In this context, it is wise to use the mediator. This professional, thanks to his good knowledge of credit and his network, negotiates the best prices for the realization of a real estate project.

Energy Regeneration Challenge

Besides inflationary pressure and rising interest rates, another shock awaits borrowers: energy renewal. After the information and encouragement, now is the time for “coercion and punishment,” as Alan Turgeman points out. France’s energy laws will suppose from 1Verse January 2023 Execution of works in all dwellings that are considered thermal sievesUnder penalty of rent prohibition.

As of 2025, these restrictions should relate to 650,000 energy-intensive dwellings, and then 1.7 million in 2028. Altogether, 5 million dwellings classified F and G will be affected, i.e. 17% of the main residences. To meet the cost of energy renewal, aid has been provided by the government such as MaPrimeRénov’, Eco-PTZ or pre-renewal loan. This financial assistance can be supplemented with other financing solutions such as a mortgage. Simulators allow in a few moments to get an idea of ​​how much can be borrowed.

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