CASE. Real estate: decrease in rates and prices, increase in the number of transactions … because the market is growing

With the drop in interest rates and an adjustment in prices that are confirmed, the real estate market is starting to regain some color. But for professionals in the sector, there is still no talk of a recovery.

The first encouraging signs have finally arrived. The real estate market is – slowly – starting to recover. According to the Laforêt network, the sector has indeed seen promising growth since the beginning of the year. In the first quarter of 2024, the group, which has 720 agencies in France, recorded an increase in supply of 4.8% at the national level compared to the last quarter of 2023. It also noted a slight increase in real estate transactions.This gradual recovery of activity would be stimulated by three main levers. First, the drop in interest rates that gave new impetus to pending real estate projects. Then, the drop in prices that started last year, and that continues. And finally, an increase in the number of loans granted by banks.

Rates are loosened

The Crédit Logement / CSA Observatory confirms this trend. Since the beginning of the year, we have actually seen a moderate drop in interest rates. From 4.24% in December 2023, the average mortgage rate rose to 4.13% in January 2024, then to 3.99% in February and to 3.90% in March. The banking institutions have clearly rushed to adapt their schedule to bring the market back.

This fall had the effect of boosting the number of loans granted. Between December 2023 and March 2024, they increased by 68% in the new real estate market and by 33% in existing properties.

The average mortgage rate increased from 4.24% last December to 3.90% in March 2024.
The Housing Credit Observatory / CSA

Towards a price adjustment

Another parameter that improves for future owners is the general drop in property prices. The Laforêt network therefore noted over the first three months of the year a decrease at the national level of 1.2% compared to the last quarter of 2023.

Although moderate, this price correction is a key indicator of a slight recovery in a still fragile market context. Of course, not all the territory is in the same boat and there are big disparities depending on the region. Thus, the fall is particularly marked in Bordeaux (-2.3%) with an average price per square meter at €4,488, but also in Strasbourg (-2% at €3,611/m²), Metz (-1.9 % to €2,412/m²). ), Rennes (-1.5% to €4,108/m²), Paris (-1.5% to €9,711/m²)2) or even Lyon (-1.2% to €4,775/m²).

There is a big price disparity depending on the region.
The forest

The drop in prices, on the other hand, is less spectacular in Toulouse (-0.8% to €3,595/m²), Rouen (-0.5% to €2,687/m²) or Lille (-0.7% to €3,371/m²). In some cities, on the contrary, prices continue to rise. This is the case of Biarritz (+1.4% to €8,123/m²), Brest (+1.1% to €2,346/m²), Nice (+1% to €4,897/m²) and Marseille (+ 1.1% to €3,811). /m²).

The sale is very light

As for real estate transactions, a symbolic recovery at the national level was recorded from January to March 2024 by Laforêt on its network with a modest increase of 0.5% compared to the previous three months.

Buyers are also more willing to negotiate the sale price. According to the group, today’s negotiations relate to 8 out of 10 sales, compared to 6 last year. The only exception to the rule: accommodation located in popular areas or offering rare features, such as a top floor with a terrace or a house on the sea.

Despite these encouraging signs, the market is struggling to overcome certain obstacles such as stricter environmental regulations, stopped construction and restrictive housing credit conditions imposed by the Financial Stability Board (HCSF). We are therefore witnessing a clearing of the building market, but the clouds on all sides are still threatening.

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