The increase in borrowing costs may have clipped the wings of buyers and weighed on the market, but nothing is helping. Households still see stone as a safe haven. A large part of them can hardly even imagine that prices could fall. According to a BPCE study published this Tuesday, which is based on a representative sample of the French population of 2,050 people, 24% of respondents even think that prices will rise slightly in 2024, and 14% that they will rise significantly. 12 months. Only 22% think they will fall slightly and 3% think they will fall sharply. Those who shop are even more pessimistic: 26% of them believe that prices will rise slightly. These results are surprising.
“The economic memory of the French is stubborn. For 20 years, they have experienced constant price increases. It is hard for them to imagine a decline. In public opinion, price growth persists», assures Alain Tourdjman, director of studies and foresight of the French banking group BPCE. This psychosociological behavior of buyers and sellers slows down the decline in prices.
Includes psychosociological behavior
The year 2023 did not see a significant drop in prices. By no means is it enough to offset the rise in lending rates. According to the National Real Estate Federation (Fnaim) in France, prices have fallen by only 0.7% since the beginning of the year. A number that could drop to -3% or -5% in 2023 depending on the networks. “First we see the adjustment of volumes and quantities and later prices», comments Alain Tourdjman.
However, prices are expected to fall more sharply in 2024, between around -8 and -9%, according to BPCE. “Sellers will be forced to let go and lower prices. A decline that will gradually flow into the system, but we are currently in a very typical period of market slowdown. marks Alain Tourdjman. Some buyers think prices will drop. And they are in no hurry. “Therefore, some buyers expect a drop in prices tomorrow they say why buy today. We are in a market of expectations, which is causing a gradual decline in prices», adds Alain Tourdjman.
Temporary price drop?
The wait-and-see approach confirmed by the real estate network L’Adresse: If, from the end of 2022, the wait-and-see approach on the part of the buyers started, it also caused the refusal of sellers to reduce prices. a wait-and-see attitude on their part, the network explains. “The fact that rates exceeded 4% this summer highlighted the market slowdown we have seen since the start of 2023 and further reinforced a wait-and-see approach by buyers without sellers accepting further discounts. . Big cities, where prices are the highest, were penalized the most, while in some medium-sized cities the market held up relatively well and still allowed a rotation of goods.», analyzes Brice Cardi, president of the Address network.
According to Brice Cardi, the decline in prices in the first half of 2024 could end before the end of 2024 if lending rates decrease and the market recovers if possible. “In the first half of 2024, the decline could reach 5%, as sellers now realize that if they want to sell, they have to adjust their price to the buyers’ budget! Some owners who were initially “in no hurry” put their property up for sale for more than a year, they have no choice but to lower the price! But one thing is for sure: the “prime target” properties in their market, such as quality homes priced below €500,000, will not suffer as supply remains tight and demand strong. And if rates drop slightly in 2024, some buyers will come back!» projects by Brice Cardi.