Finally some good news for future buyers. Households’ real estate purchasing power has improved over the last six months. A first time in four years according to a study published on Thursday 27 June by The best rates. On average, the French earned 3 million2 in the 20 largest cities in France. A gain that seems minimal but could entice someone to do it relaunch their real estate project.
In detail, the municipality of Saint-Etienne finds itself at the top of the ranking. A buyer who obtained a loan at 3.7% with a lending capacity of 169,408 euros can now acquire a 123m2 in this city, against 118 m2 in December 2023. For the same sum (with the same interest rate), buyers earned 4 million2 in Strasbourg, Toulouse, Lille, Reims, Dijon and even Le Havre.
The gain, however, is very slight in Paris, Nice and Toulouse (+1 m2). “Although these developments are still shy, it is a very positive sign for the market”comments Maël Bernier, spokesperson for Meilleurtaux.
Consequence of the fall in interest rates
This improvement in the real estate purchasing power of families is explained above all by the slight increase decline in interest rates since the beginning of the year. According to the data, the average credit rate went from 4.2% in December to 3.7% in May the Housing Credit Observatory/CSA.
At the same time, real estate prices have tended to decline. In one year, prices fell by 3.8% across the country (-4.1% for apartments and -3.5% for houses), according to the report last evaluation of the National Real Estate Federation (Fnaim). This is the largest drop in the last 15 years.
Some cities such as Nantes and Lyon also recorded larger declines, of 11.2% and 9.1% between the end of May 2023 and June 2024, respectively. “The decline in the real estate market has led to a decline in prices per m2 especially in big cities”reports Maël Bernier.
What prospects?
The drop in rates and prices certainly allows families’ borrowing capacity to be gradually increased. But it should be remembered that in recent years this percentage has continued to decline. “If we compare with the end of 2021, some cities lost up to 35 million2 the equivalent of two habitable rooms. This is the case for example of Nîmes (-35 m2), Toulon (-34 m2) and Le Mans (-34 m2). In the same period, we also notice a very significant decline in purchasing power in Saint-Etienne (-27), Grenoble (-21), Le Havre (-25), Dijon (-19) and Marseille (-19) »explains Maël Bernier.
It remains to be seen whether the positive signs of recent months will continue. According to Fnaim, prices are expected to continue to fall nationally, between 5% and 7% in 2024. In Paris, prices are expected “small change or slight increase”, indicates this Thursday, June 27, the notaries of Greater Paris in a declaration.
As for interest rates, industry experts expect stabilization around 3.5% in 2024. But the political context could alter their predictions…