State of affairs in the Paris real estate market and in the Paris region in summer 2022

(Image credit: Adobe Stock - )

(Image credit: Adobe Stock – )

While prices fell 2% overall in Paris last year, according to data from MeilleursAgents, credit conditions are tightening and weighing on households’ ability to borrow to carry out their real estate projects in the Paris region since the beginning of the year and ending the second half of the year Year 2022 has in store for us before we focus on providing advice if you wish to purchase a property in Paris or in the Paris region.

Real estate in Paris and Île-de-France: review of the first half of 2022

Property prices in the French capital have been moving away from other major French cities for almost a year. For example, while they rose by more than 6% in Marseille, prices in Paris fell by 2% over the same period. The average square meter price in Paris even approached the symbolic mark of 10,000 euros in May 2022.

With the exception of Hauts-de-Seine (92), where the development of the real estate market fell by 1.4% in one year, the other regions of the Île-de-France are experiencing a certain dynamism. Val-d’Oise (95) recorded the highest price increase, up 6.3%, followed by Seine-et-Marne (77) +4.9%, Essonne (91) +3.8% and Seine-Saint -Denis (93) +2.7%.

Although demand generally exceeds supply and prices are falling in some popular cities, credit activity has slowed since early 2022.

The conflict in Ukraine has created a lot of uncertainty in the economy and has had a major impact on energy and agricultural commodity prices, driving inflation to new record highs. Tensions on the bond market and the prospect of interest rate hikes by the central banks also supported the rise in borrowing rates and slowed some households from buying real estate.

According to L’Observatoire Crédit Logement / CSA, lending in France fell by 5.6% year-on-year in the first half of 2022, as did the number of loans granted, which fell by 7.3% over the same period.

Also read: Becoming the owner of your property: What it really costs you

Outlook for the real estate sector in the Paris region for the second half of 2022

Prices in Île-de-France are likely to continue to rise, thanks in particular to the Grand Paris Express project, which aims to change the dynamism of Île-de-France by connecting the region to Paris. On the other hand, in Paris, the opposite situation can be observed, where part of the population is trying to move out of the capital to get larger areas and/or a garden.

The shift in rhetoric from the European Central Bank (ECB) on raising interest rates to combat runaway inflation should also support a rise in lending rates.

The uncertainty of the economic environment in France, but also internationally, as well as the loss of purchasing power of French households, should also push interest rates up in this second half of 2022, which should further slow down the pace of purchases by households that need to borrow to buy .

For François Villeroy de Galhau, governor of the Banque de France, interest rates could reach 3% by the end of the year.

Tips for possible shopping in Paris or Île-de-France

The Paris price drop could prompt some buyers to take advantage now, while others might want to wait until the drop is even bigger. It’s also possible that some may want to buy in Île-de-France today before prices rise too high to avoid buying on the high, while others may want to wait for prices to fall again before getting started…

However, keep in mind that property prices take time to adjust downwards. Although there are many uncertainties about the economic context, you should also know that buying real estate now, if you have a concrete project, could allow you to have a larger borrowing capacity than in the future due to the rate of increase and the credit crunch that is taking place secure conditions.

To save time and get the best loan terms for your project, do not hesitate to hire the services of a real estate agent.

If you want to apply for a loan yourself, it is important to do so with at least three different banks in order to be able to compare the offers on the market. Always remember to play the competition!

Kaddouri Ismail

I am Ismail from Morocco, I work as a blogger and online marketer. I am also the founder of the “Mofid” site, in which I constantly publish many important articles in the field of technology, taking advantage of more than 5 years of experience working in the field. I focus on publishing in a group of areas, the most important of which are programming, e-marketing, digital currencies and freelance work.

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