Real estate: loan rates, banks, property prices… to recover the market in 2024?

Is good real estate weather coming after the embolism? This is the confidence from Maël Bernier, spokesman for the “meilleurtaux” broker with RTL, who gives freedom to think about it. It has seen mortgage rates fall for several days, which has not happened since January 2022.

“We’re getting bank scales, I wouldn’t think I’d say in December 2023, that are even going down for the first time. Plus, they’re not reductions targeted at very high-income households. A little bit from everybody. The big national banks are starting to introduce cuts of 0.20 or 0 .30 points. I think others will follow,” he explains on the Focus podcast this Monday, December 18.

Now we can find the course between 4 and 4.3% over 20 years. This means thatat worst it is stable and at best it declines. At the current pace, we should be at 5% today. This is not the case. This trend could continue over time.

Several elements can lead us to this. First: this is a speech by the heads of the US central bank and the European central bank. We understand that the key rate hike policy that was put in place in recent months has been put on hold. Key rates indicate the pace of real estate loan rates. Because the bank that lends you money borrows an amount from the ECB. The key rate is the bank’s lending rate.

Banks ready to make efforts to sign the loan

As a result, banks are gradually returning to the real estate market. This is what brokers like Meilleurtaux see. And this is very good news for buyers. This means that they will be ready to make efforts to collect loans. Real estate also serves to retain customers and gain market share.

Especially since the conditions for obtaining a loan have been slightly relaxed, as you can borrow for more than 27 years if you carry out work on your house at the time of purchase. Most new buyers do.

But above all, there is a risk of a small gain in additional purchasing power, as wages will rise faster than inflation. In fact, the relationship will be reversed. In 2022, when inflation was between 6 and 7%, wage increases averaged 3.5%. Twice less. Inflation should be around 2.5% in 2024, but initial feedback from companies suggests that salary increases will average 4 or 5%.. So there will be an increase in purchasing power… and thus an increase in the purchasing power of real estate.

Market prices are falling: I’m not sure it will last

Real estate prices must continue to fall. And that’s what’s happening right now. In recent months, if we look at the numbers from notaries: -1.6% for the price of the house and -2% for the apartment. Paris is down more than 5%, but it is an atypical market.

Will the decline last? I’m not sure because there are still few offers and many requests. So prices will stagnate. But it’s not too serious. Real estate will revert to what it essentially is: buying a roof to live on. This market needs stability and that is what is emerging for 2024. We have confused real estate with the stock market or casino too much, these last years. It will change.

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