The surge in real estate prices has just undergone a stop. These errors arouse discussions and perplexity, and produce their share of analysis and forecasts. Will the stone market collapse or resume its march forward?
In twenty-five years, housing prices have more than tripled, and even almost quadrupled. Such ascension is impressive. However, it deserves to be doubly put in perspective. On the one hand, given the general increase in prices, close to 50 % in twenty-five years, it in reality hardly exasperated, in relative value, a doubling.
On the other hand, this ascent was in no way linear: the effervescence phase lasted in fact little time, ten years at most, between 2001 and 2009. The prices were Packed, before setting off in the following years. In 2019, on the eve of the COVVI-19 crisis, they had not even recovered their 2011 levels yet, and had even flexed in constant euros (excluding inflation). From the low point of 2016-2017, a new increase phase began, but it had nothing comparable with the previous one and stopped in the summer of 2022.
The ascending movement has been concomitant to increasingly favorable borrowing conditions, that is to say a softening of access to the credit market with banking networks, an extension of the duration of loans and a dizzying drop in interest rates. Conversely, the rise in interest rates and the tightening of the conditions for the allocation of credits by banks are enough to explain the current stuttering of the market. But there is an exception to this rule: the market made the foreground after the subprime crisis, from 2009 to 2016, while the rates collapsed, going from 3 % to 1 %.
Sensitive market
According to Jacques Friggit, senior expert official of the real estate market and known for its snack of real estate prices on long time ( published on the site of the General Inspectorate of the Environment and Sustainable Development ), these have long sailed in concert with household income in a sort of “tunnel”, from where they came out about twenty-five years ago.
From that moment on, the increase has exceeded much the increase in buyers’ resources. Households have devoted increasing shares of their resources to stone investment, even if it means going into debt initially with significant interest rates, then savoring optimal borrowing conditions. But this mechanics did not survive the crisis of subprimes and the austerity policy initiated in 2013: real estate has fallen and resumed until eight years later, before inflation again put back everything in question.
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