“The real estate market is going down and we shouldn’t panic”. Frederic Fauillet, notary of Caen and responsible for the national estate statistics of the High Council of Notaries, believes that “Stability is welcome and consistent, following a significant rise in transaction volumes and property prices since the end of the first pandemic-related confinement in mid-2020.” phenomenon “European and even global, which affected most OECD countries”.
Families were then looking for the extra space they needed, more green space, and the many desires that led to the investment. At the end of 2019, before the health crisis linked to Covid-19, France crossed the threshold of one million real estate deals. A largely broken record two years later, at the end of 2021, with more than 1.2 million transactions executed. Trees do not go up to the skyFrederic Fauilleau continues. Our sense today that we no longer buy anything at any price, an economic dialogue has begun between the seller and the buyer. » Notaries expected for this year 2022 “When a drop occurs, about a million transactions, then prices will stabilize “,” He adds. According to the 21st Century Agency Network, prices are already stagnant, especially in major cities, in Paris, Bordeaux, Nantes or Rennes.
In fact, the entire European real estate market is starting to run out. In an analysis published in July, rating agency S&P indicated a “soft landing” In the main markets of Europe, more specifically a Slowdown in property prices: roughly 10% on average in 2021, 5% this year, and 3% in 2023. However, this average masks large disparities between countries, with house prices expected to fall this year in Sweden and next year in the UK, according to estimates by S&P Global Ratings. “We have reached a high point in terms of activity and property prices”summarizes Sylvain Breuer, chief economist for Europe at Standard & Poor’s.
Mortgage rates rise in the eurozone
This shift can be explained primarily by rising mortgage rates in Europe, which are limiting household debt spreads. The sharp rise in inflation since the beginning of the year, which was reinforced by the war in Ukraine, has led to a rise in long-term interest rates, on the basis of which banks depend in setting mortgage rates. The European Central Bank (ECB) in July also began increasing key interest rates in an effort to curb this accelerating inflation, but this move was largely expected by the market.
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