Real estate price: should we bet on a decline and put your purchase back?

Un nombre de transactions record, des prix qui s’envolent… Le marché de l’immobilier chauffe. Mais jusqu’à quand ? Faut-il attendre (un peu) avant d’acheter pour profiter d’une accalmie ?

The real estate market does not be flexible.According to the last review of the notaries, the volume of sales of old housing reaches 1,130,000 transactions over one year at the end of May, a record level since 2000!A sustained demand that draws prices to the tops.At the end of August, they should climb over a year of +5.5% for apartments and even +8.9% for houses, according to projections from the avant-contract.A quasi-generalized frenzy with peaks, particularly in Ile-de-France, in Lyon, Toulon, Montpellier, Troyes, Poitiers or Brest.In these cities, the sale price of houses has increased by almost 10% over the last 12 months.But until this outbreak of real estate prices will go?

One thing is certain, the current situation "confirms the attraction towards a reinforced need for space, in particular residents of large metropolises" which has accelerated with the health crisis, note the notaries.If prices in Paris stagnate at a very high level, 10,720 euros per m² in August, the capital "currently faces an urban exodus phenomenon, households favoring a more pleasant living space in the suburbs.This market transformation has induced a considerable price increase, more particularly houses, on the outskirts of major cities, ”reports economists from the postal bank in their latest real estate study.

Des prix qui ont presque doublé en 20 ans

This price increase does not date yesterday.A recent OECD report (1) estimates that in France, the actual price of housing jumped almost 90% between 2000 and 2020.For example, he notes that to buy an apartment of 60m2 in a capital, a couple with two children had to devote 6.8 years of salary in 1985 but 10.2 years in 2015.The increase in the cost of housing is particularly glaring "in urban areas, where the housing park and the supply of land to be built are reduced," notes the OECD.

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"The strong real estate demand is supported by the attractive credit conditions and also by the fact that some individuals have put themselves in the head that prices could not lower.This leads these households to anticipate a future capital gain and sometimes to invest in sums which may seem crazy but which we think we can recover at the exit and even more thanks to the lever effect of the credit, ”explains to Moneyvox XavierTimbeau, the director of the French Observatory for Economic Conditions (OFCE)."Investment in stone remains very popular with the French during periods of strong uncertainty where financial investments are more risky," confirm economists from the Banque.

Des conditions de crédit idéales

This situation is facilitated by the drop in real estate interest rates which, months after month, beat records.The dashboard of the Housing/CSA Credit Observatory published Tuesday thus reports an average rate of 1.05% in July with 0.87% over 15 years, 0.98% over 20 years and 1.18% over 25 years.Ideal conditions to borrow today.In theory.

"If we can obviously be delighted with the rates that are still extremely low, the banks confirm their increased vigilance on the granting of real estate credits and the obligation they have to respect increasingly strict rules.Consequently, it is therefore not impossible for loan refusals to multiply in the weeks and months to come, ”notes Maël Bernier, director of communication for the Better.Indeed, financial institutions must be more than ever vigilant about the debt rate of households which must not exceed 35% in principle and over the duration of the loan which cannot in theory exceed 25 years.“Banks give loans to households who are able to deal with a possible value in the event of a reversal of the market.We find ourselves in a market split in two with on one side those who can try their luck and those excluded from it because their income and or guarantees are insufficient ”, analyzes Xavier Timbeau.

The best rates for your real estate loan

Une fracture immobilière

A situation reinforced by the shortage of housing, more or less strong depending on the territories.In his latest report, the notaries cite the case of southern Brittany where “the goods for sale have grown up.»On the whole of France, the construction of new housing is far from the 500,000 estimated necessary each year.“In the Paris region, it would be for example to densify the first crown but that is not done in a snap of the finger.And above all, in the absence of strong incentives, it will be difficult for local elected officials to accept such a policy.Current owners if there is a sharp increase in housing production in their neighborhood may fear for the value of their property and therefore not renew the team in place during the next elections, ”notes Xavier Timbeau.

Result, all conditions seem to be met to maintain pressure prices."Nothing seems to stop this crazy race," notes Marc Fiorentino, a best plan co-founder, who speaks of "real estate fever".With the key, "a fracture" which creates a "abyss" between "those who have goods and who enrich themselves with the increase.And those who do not have them and feel excluded."In the current state, this evolution of real estate prices which may seem delusional risks continuing, regrets Xavier Timbeau.However, we cannot repel the most modest and the least qualified over.In the short term, you have to find more solutions to have an accessible housing offer so that people live and work in tense areas.It is a problem that deserves to be at the heart of the next presidential election.»»

(1) Pierre by Pierre, Building better housing policies, OECD Edition, 2021