The fourth wave of the “Les Français Immobilier” barometer by Laforêt and OpinionWay examines the intention of French people aged 18 and over to acquire a property in 2024, the role of credit rates in financing real estate projects, as well as the opinion of the French on topics such as energy renovations, access to housing and seasonal rental.
2024, a tough recovery for the real estate market
The current economic crisis has resulted in the outrage of banks with stricter conditions for accepting loans. According to the latest figures from the Banque de France, new lending actually fell by more than 41% in one year. In this context, almost six in ten French people believe that the current criteria for obtaining a property loan would lead banks to refuse to lend them money (58%) and say that it would discourage them from buying a property. (56%).
Conditions for obtaining credits are a significant obstacle for potential first-time buyers. Two-thirds of respondents who do not own any real estate definitely expect to be rejected by banks (66%), and more than half would be deterred from accessing real estate (59%).
Likewise, the French, whose financial situation is more fragile, are also more pessimistic. 66% of respondents from the so-called popular categories are convinced that their file would not pass through the bank (compared to 49% from the so-called higher categories).
The desire to realize your real estate project is growing stronger and is gradually overcoming the obstacles associated with the economic situation.
However, the brake on the level of rates continues to lose its importance: today a third of respondents (32%) say that rates would have no impact on a potential real estate project, which is 6 points more than in December 2022. Faced with a protracted economic crisis, the desire to implement their real estate project and gradually overcomes the obstacles associated with the economic situation. Despite everything, the level of rates remains a significant obstacle for most French people. This month again, 64% said they might question their project for this reason (-1 point compared to September 2023).
In particular, the French aged 25-34, at a key moment when people are generally building their life plans, attach less importance to the level of rates than before. 38% said they would not question their real estate project for this reason, compared to 31% in December 2022.
By demonstrating their desire to access property and/or resignation, even the least affluent French would be less deterred by rate levels. Today, 38% of respondents whose household earns less than €2,000 per month would not reconsider their real estate project for this reason, i.e. 3 points more than in September 2023 and 6 points more than in December 2022.
Specifically, to date, one in four French people have been forced to cancel or postpone real estate projects due to the economic situation (23%). These adverse conditions and the prolonged economic crisis are causing some regrets: a third of non-owner respondents regret not having invested in real estate earlier (34%). In fact, despite the difficult situation for the market, real estate investment remains considered a safe haven.
The real estate projects of the youngest French were particularly affected. 39% of people aged under 35 have had to cancel or postpone a property project, compared to just 12% of people aged 50 and over.
Purchase intentions for next year are stagnating
In this context, no revival of the real estate market is expected for 2024. Indeed, purchase intentions for next year are flat compared to intentions for 2023. Last March, 14% of respondents said they intended to buy property in 2023; and today 15% of the French have this project for next year.
Purchase intentions are primarily driven by respondents under the age of 50 (23% compared to 8% among their elders) and parents (20% compared to 13% for those without children). An encouraging sign for 2024 is that real estate projects are advancing 3 points among these populations.
Moreover, announced government measures to revitalize the market have had little effect, with the economic situation likely weighing on people’s minds. Today, 23% of French people say that these measures, such as the relaxation of conditions for access to PTZ, encourage them to invest in real estate.
These restrictions on buyers have implications for sellers, leading to real estate market adjustments. The National Real Estate Federation (FNAIM) estimates a drop in sales for the entire year 2023 by at least 20%. With buyers reluctant or disillusioned with banks, sellers are forced to reprice their property if they want to attract buyers. One in three French people assures that if they had to sell a property in 2024, they would be prepared to lower the sale price to find a buyer (36%). Thus, the market is entering a period of transition while waiting for the recovery of the economic context after a period of access to assets greatly facilitated by extremely low rates that led to price increases.
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Investing in and renovating a thermal strainer is seen as an opportunity
As the 2024 Olympics approach, their impact on the desire of the French to invest in rental property remains very limited. At the end of the year, the trend is even more downward: 9% of respondents say that Paris 2024 will encourage them to invest in rentals (-4 points). The obstacles mentioned in the Laforêt study carried out last September undoubtedly remain very present: not only the unfavorable economic situation, but also the restrictions and responsibilities associated with rental management.
Interest in rental property is falling in the run-up to the 2024 Olympics, particularly among populations that were most sensitive to it last September. 12% of French whose household earns less than €2,000 a month said the event would encourage them to invest in rental properties, down 8 points from September.
On the other hand, in connection with rising energy prices and stricter regulations on the energy efficiency of households, the French pay special attention to DPE (diagnosis of energy efficiency). A study carried out for Laforêt in March 2023 shows that more than eight out of ten people surveyed look at it when consulting real estate ads (83%).
However, due to the lack of dynamics in the real estate market, the French do not rule out turning to properties whose DPE would not be satisfactory. On the one hand, houses with DPE in class G are interesting for potential buyers: most respondents believe that today buying a so-called “thermal screen” and renovating it is a good solution for real estate investment. (52%). On the other hand, despite the ban in force since the beginning of the year, more than one in four would be prepared to rent accommodation with DPE in class G if it met all their other criteria (28%), a sign of a certain persistent lack of knowledge on the subject . DPE thus plays a key role today, while legal and commercial measures (subsidized loans, concessions applied by banks, etc.) are increasing to support renovation work and the purchase of high-performance goods.
Renovating the so-called “heat screen” housing would be more feasible for wealthier French people, who would undoubtedly have more means to finance the work (57% of people whose household earns €3,500 or more per month). In terms of renting accommodation with a negative DPE, intentions are stronger in areas where the real estate market is tight, especially in the Île de France (35% compared to 28% in the provinces).
Intentions to buy real estate for next year are stagnating
The recent economic crisis has greatly complicated access to real estate loans, as banks have tightened their lending criteria. These restrictions have some deterrent effect, especially among populations whose cases are least robust. Added to this is the level of real estate rates, which is another limitation of French real estate projects. In this context, intentions to purchase real estate for next year are stagnant, which signals a certain form of caution.
However, in the face of a protracted economic crisis, the desire to see one’s projects move forward is essential, as is a possible form of resignation. In the long run, the level of rates becomes less and less of a blocking obstacle, especially for young people who are building their life plans.
Faced with these difficulties in the real estate market, for the French, housing investment referred to as “thermal sieves” is emerging as a positive alternative. They are prohibited for rent, but are considered a good investment in a property that is subject to renovation. However, the opportunity effect of the 2024 Olympics on rental properties is less strong, probably due to management constraints for this type of investment.