Photo - My de Sortiraparis
According to the company’s latest barometer, real estate values across the country were virtually unchanged and even declined by 0.2%. However, this did not lead to market revitalization. The traditional seasonal increase in demand at the beginning of the year did not occur – on the contrary, it decreased by 2%, while in previous years it usually increased by about 7%. The decrease in activity was especially noticeable in large cities, including Paris.
The problem is mortgage rates
As Prian notes, the problem is not prices. People are waiting for lower mortgage rates and more affordable housing – in terms of credit.
Geopolitical situation creates additional uncertainty for the market. An escalation of conflict in the Middle East could lead to higher oil prices, which in turn would increase inflationary pressures. In such a scenario, banks could raise mortgage rates again, which would hit demand even harder.
Analysts warn: if rates do rise, the number of transactions in the real estate market in France could fall to 270 thousand in the next two years.
