The first relaxations on rates “been highly publicized“, according to the notaries of Greater Paris but in fact the conditions of access to credit are still limited. “In less than two years, there are 60% fewer credits» due to the rise in interest rates, accounts Élodie Frémont, president of the real estate statistics commission and notary in Paris. According to the Banque de France, 21.7 billion euros were loaned to households in the 1st quarter of 2024, compared to 38 billion in the 1st quarter of 2023 (-42%) and especially 56.3 billion in the 1st quarter of 2022 (-61 %).
“The banks claim to have reopened the credit tap but the real estate spring is like the weather: gray. The whole of Île-de-France is experiencing the same storm, with little difference between the inner and outer rings.», asserts Christian Godard, notary in Claye-Souilly, in Seine-et-Marne (77). Notaries predict an increase in the monthly payment of 12% for apartments and 17% for houses, from January 2022 to July 2024 in Île-de-France.
The drop in prices (around 6 to 8% depending on the geographic sectors) did not make it possible to offset the rate increases. Prices still remain 10% higher than they were 5 years ago overall in Île-de-France, as well as in the inner and outer suburbs.
Faced with degraded solvency, buyers have only two choices: stay on the rental market or reduce the size of their future home. “Buyers sacrifice their living space to adapt to the reality of a market. We observe a reduction in the claims of acquisition candidates with regard to their repayment capacities», Notes Loïc Cantin, president of the National Real Estate Federation, Fnaim.
Studios less affected by the drop in sales volumes
If a buyer could buy a 65 m² apartment in January 2022, they will now have to agree to lose 7 square meters in July 2024, if they want to maintain the same total borrowing cost. He will therefore be able to acquire only 58 square meters. Likewise, if he could position himself on a 100 m² house in January 2022, he would have to make an even greater effort by agreeing to cut back on 14.5 square meters. He will be able to buy a property of 85.5 square meters for a house of 100 square meters in January 2022.
It is large properties that are most affected by the drop in sales volumes, whether for apartments or houses. “The studios represent a short-term investment and are aimed at a clientele less constrained by obtaining credit. Conversely, larger properties are intended for families, a clientele more exposed to credit difficulties», notes Loïc Cantin. In Île-de-France, apartment sales volumes fell by 29% for 5 rooms and more, or 3,000 fewer sales in one year. Studios have resisted the best: the decline in activity is limited to 17% for these small spaces.
“The bigger a house, the less it sells», summarizes Élodie Frémont. Houses with 6 rooms or more, which had seen their sales take off in recent years, are experiencing a more severe decline than small houses with a drop of 31% from 2022 to 2023 (compared to -22% for houses with 3 rooms or less). From 2022 to 2023, the drop in house sales of 28% is found in both the inner and outer suburbs, and only small houses in the outer ring have a more limited drop of 21%.