immobilier

European real estate: discover the consequences of rising prices

Between January and July 2022, purchasing power per square meter decreased by 5 square meters in France. It is 13 square meters in Germany and 14 square meters in Belgium.

Between the war in Ukraine and accelerating inflation, the confidence of European families and their purchasing power of real estate is affected. This is the case in France, as well as in Germany and Belgium. These three countries were targeted by the Aviv Group (agents SeLoger and Meilleurs) in its first gauge of European property prices, according to reports. reverberation.

In all of these real estate markets, home buyers are facing higher mortgage interest rates since this year. “This price increase already means changes in the purchasing power of French, German and Belgian households”, explained the authors of the barometer. Between January and July 2022, purchasing power per square meter decreased by 5 square meters in France and 1 square meter in Paris, rising from 64 square meters to 59 square meters and from 19 square meters to 18 square meters respectively.

Credit rates will continue to rise »

On the other hand, the loss in Germany is 13 square meters for the whole country, ranging from 62 square meters to 49 square meters and 9 square meters for Berlin, from 41 square meters to 32 square meters. Belgium also shows a clear reduction in the purchasing power of real estate: -14 sq m across the entire territory (from 102 sq m in January 2022 to 88 sq m in July 2022) and -10 sq m for its capital, Brussels (from 70 sq m to 60 sq m) .

“Credit rates will continue to rise, Barometer analysis, in light of European Central Bank decisions involving significant changes to credit terms, and thus to housing markets. » At the end of July, the European Central Bank unexpectedly raised key interest rates by 50 basis points as part of its first tightening in 11 years. France is going in the same direction as the United States.

The Governor of the Bank of France recently announced that real estate interest rates in France could reach 3% at the end of 2022 (versus 1.7% today). “A change of this magnitude, barometer highlights From the collection of Aviv, means a 13% mechanical decrease in the ability of households to buy compared to the current situation. »

Europeans want to buy bigger and greener spaces

So far, in all three countries, real estate prices have not yielded the desired results. Between January and July 2022, it rose most significantly in France (+1.7%), Belgium (+1.8%) and Germany (+3.4%). Post-Covid trends have been confirmed, which has translated into Europeans wanting to buy bigger spaces with more green space.

But the scale qualifies: The first signs of a slowdown, both in terms of activity and prices, began to appear in the first half of the year in some countries such as France and Germany. » In France, the Paris market lost 0.4% to 10,192 euros per square meter (between January and July 2022). Similarly, prices across the Rhine fell in Hannover (-1.8% to €4,019 per square metre), Essen (-0.5% to €2,954 per square metre) and Düsseldorf (-0.9% to €5,206 per square metre). On the other hand, Berlin is still on an upward trend (+3.5% to €5,071 per square metre), as well as in Belgium, Brussels (+4.4% to €3,428 per square metre).

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