Christmas is coming, time to take stock, take it easy. As 2023 was not an easy year for real estate loans, we look back at the main episodes that marked the year. With some projections for 2024 as a bonus – that’s a giveaway.
Rates that went up, went up
Using the above 20-year rates, a French person earning a net monthly income before tax of €3,500 could borrow €229,273 in January 2023. In December, their borrowing capacity increased to 196,300 euros, i.e. down 14%directly related to rising rates.
And not only for individuals, taking out a loan has become more expensive. Banks also saw margins shrink. As a result, they tightened lending conditions and began to lend less, resulting in a drop in loan production (real estate loan production fell by more than 40% in the year to the end of October 2023). In short, 2023 will be a complicated year for the credit market.
The authorities are significantly behind schedule
HCSF directly in the shoes
Little known to the general public, the Council for High Financial Stability fulfills the role of an arbitrator on the real estate market. This means that his decisions have an immediate impact on borrowers.
Will HCSF shift gears in 2024? Bets are open.
On the Pretto side, what do we suggest?
This year, Pretto called for specific measures to benefit future buyers. Between them, adapt HCSF standards for highly energy efficient goods or acquisition projects including energy renovation works.In short, enable buyersborrow more to finance energy renovation work, adding an additional exemption to the 35% debt. This would save around 30% on the energy bill, freeing up 3 points of disposable income for the most modest households. A real plus for remains alive !
2023, a buyer’s market
The big coup of 2023 is a shift from a seller’s market to a buyer’s market. The periods of low rates we’ve experienced in the past have actually boosted house prices – borrowing wasn’t really a problem with rates below 1%.
Across mainland France, the observed decline in sales prices is 2% for apartments (1.6% for houses). In the third quarter, prices even fell by 5.3% in Île-de-France, according to data from the Supreme Council of Notaries. AND the trend should increase in 2024.
Result : time to negotiate. Now is the time to put your arguments together and lower the selling price to regain some buying power.
Becoming a professional negotiator can be learned
At Pretto, we are committed to providing you with the tools to successfully complete your property purchase project. That’s why we’re mobilizing to provide you with plenty of advice on how to learn how to negotiate well. It will pass our itemsbut also through a video masterclass to share advice from real professionals.
And what to expect in 2024 on the real estate market?
It’s time to plan ahead (and still believe in the future ¹). What does 2024 have in store for us in terms of real estate loans?
In 2024, natural competition between banking organizations should accentuate this movement rates could drop significantly from mid-year. Great news for anyone looking to buy in the coming months (and for those who are buying right now and will be able to renegotiate the price)!
From looking for real estate to getting a loan
Be prepared for your first real estate purchase. All our advice is collected in a free ebook!
Finally, the beginning of 2024 will be more than ever devoted to negotiations. Now is the time to try lower offers. But beware, don’t wait too long as the fall in property prices could stop once rates come down. Now is the time to have good deals!
With that, it’s time to wish you a great end to 2023. See you in 2024 for even more analysis and deciphering of the real estate market.
Free time during the holidays? Our articles are here to guide you between two chocolate truffles. On the program 100% Christmas selection: