These 5 reasons for optimism in the real estate market

These 5 reasons for optimism in the real estate market

What if we stop remembering for a moment only the bad news that comes to us? It is true that by focusing on the sector immovable, fears and doubts are great after a long period of euphoria. Everything is currently indicating that years of record sales are over, prices are going down, credit rates are on the rise … Not to mention war in Ukraine and the resulting number of shortcomings as well as the returninflation complicate things considerably. And during this time, new construction has still not slowed down.

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At the same time, the political context is hardly more favorable. The re-elected president never had real estate at heart and this issue has not really attracted the political class of the last five years, apart from controversy (the owners were qualified as “retirees” by Emmanuel Macron., unhygienic buildings that collapsed in Marseille, individual houses abused by former Secretary of Housing Emmanuelle Wargon or business squats or from unpaid rents).

Worst: the second time under VE Republic – previous date 2017 -, housing was stripped of the ministry. This topic has been moved to the category of sub-topics in the portfolio of Amélie de Montchalin, the new Minister for Ecological Transformation and Territorial Cohesion. However, the government promises to rectify the situation after the parliamentary elections on June 12 and 19. “There will definitely be new personalities dedicated to transport and housing under the supervision of Minister Amélie de Montchalin,” assures Olivia Grégoire, government spokesman.

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In the meantime, the real world does not understand this absence, even if only temporarily, at a time when the purchasing power of the French is in crisis. “Record demand faces shortage of goods and rising prices, even far from metropolitan areas” emphasizes Guillaume Martinaud, President of Orpi, a leading real estate network in France (1,350 agencies). Angevins, Rémois or Toulonnai who want to gain access to real estate are those whose purchasing power of real estate (surface they can hope to obtain under current financial conditions, editor’s note) melted in at most two years. According to broker Meilleurtaux, he lost between 10 and 27%.

• French real estate has a solid foundation

As has already been said, despite this delicate list of difficulties and these real concerns, we wanted to remind you at the beginning of the summer, a period traditionally favorable for real estate transactions, that the picture was not so bleak in the end. Let us not forget that the French market is on a solid footing and that the fall in prices, which is apparently beginning to show, is often just a saving correction after years of rising prices. the only way to moderate interest rate growth, which has been very real in recent months.

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• Borrowing conditions remain good

We take this opportunity to provide you with some tips that will allow you to complete the operation in the best possible way. Here too, it must be borne in mind that, although the increase in rates poses a risk that a growing number of French people will be excluded from access to credit, conditions remain particularly good. And above all, when we compare rates with inflation, we benefit from a negative real interest rate. Suffice it to say that we get rich by getting in debt, and provided that the economic situation does not put tenants in trouble, real estate investors can do business well.

• The market is recovering

Another reason for optimism is that the stone sector, known for its traditional approach and immobility, is less and less like its reputation. Whether it’s transactions, property management, rental investments or even construction, no business today escapes challenging traditional models by start-ups. While relations between “traditional” real estate agents and newcomers seem to have normalized, there are frequent frictions between traditional administrators and “neo-administrators.”. It is up to everyone to get an idea of ​​the value of the service that these newcomers provide, but their arrival at least expands the range of rates available.

• Secondary residences and furnished rentals are regaining their colors

In conclusion, it should be noted that two sectors have indeed revived with strong dynamism, one immediately with the health crisis and the other now that it seems to be really behind us: second housing and furnished rentals. In the first case, we see a return to the grace of holiday properties, which seems destined to last. This trend benefits both sectors that attract tourists and rural villages benefiting from beautiful architecture and houses with large plots of land. The novelty of the present is that we want to consume this property with greater ease, whether we are the owner or the tenant.

An aspiration that justifies the multiplication of concierge services and the creation of new forms of second home with services shared by several owners. The rediscovered dynamics of furnished rentals is more due to the return to “normal” life. While covid accompanied by the collapse of tourism, the presence of foreigners and even the mobility of the French, all these elements returned to the green. An opportunity for landlords who have left massive tourist rentals to return to them if they prove to be more profitable than long-term furnished furniture rentals.

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• New construction goes uphill

As for the last point of this paper, new construction is undoubtedly the most delicate and requires the greatest effort for optimism. In order to improve the purchasing power of the French in this area, the ancient idea of ​​resumption of supplies reappears. In other words, France needs to build more apartments and vacate land, both public and private, or reconfigure the existing one. The experts we interviewed show that there is reason for hope and that after the impact on the bottom, the construction situation can only improve.

It remains to reconcile this need housing, new or old, with another major problem of Emmanuel Macron’s second five-year period: the ecological transition. The president of the republic aims to renovate 700,000 houses a year, but the health crisis has revealed new desires of the French for housing: living in larger houses with outdoor spaces. This has encouraged more and more households to move out of large cities at the risk of having to drive to work and therefore spend more due to rising fuel.

“Dealing with housing boldly, making it sustainable and affordable requires thinking about how to live in France tomorrow.” proposes Véronique Bédague, CEO of Nexity, at a time when she is expected to lead the current government and who has campaigned for the creation of tomorrow’s city ministry to replace the housing ministry. According to a recent consultation with the citizens, the French want more autonomous districts, better transport services and local shops. No need to prioritize new buildings, but only renovate an existing building.

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