Inflation, affecting the purchasing power of households and increasing interest rates on credit, has led to a turbulent period in the real estate sector. However, the sector continues to show a certain dynamism, which is characterized by an overall increase in sales (home purchase + 6.5%, apartment purchase + 4.7%).[1]. While some talk of a major turmoil, the market seems to be rebalancing and changing, especially thanks to the new cranes have it.
reflection? not now …
Rates continue to rise and borrowers suffer from them: a decrease in their ability to borrow, increasingly stringent conditions for granting credit, rationing of credit production by banks … However, the monthly increase in the wear rate is already allowing buyers to breathe a little and we see their purchase plans come true . Especially since it is possible to renegotiate your mortgage interest rate at any time, especially when the economic situation is favorable. Keep in mind that real estate in France has always been a safe haven, even in times of crisis. Its status as a reliable and safe investment makes it one of the preferred investments of the French, especially with a view to preparing for retirement. In a 2022 survey by Savings and Retirement MonitorTwo thirds of the French consider that their pension is insufficient or will not be sufficient to live properly…[2]
So these various elements have a somewhat positive effect, and the decline in real estate purchases – which was declared a disaster – is finally leveling off.
Let’s not forget that rates have been very low for 10 years, and have reached the historic high 1.06% in December 2021. Doesn’t the current situation simply highlight the exceptional period we’ve lived through and not reflect a normal return to normal?
Adapt to keep your head above the water…and gradually regain strength
Like all crises, the one we are going through allows for the emergence of a certain number of resources, which specifically meet the needs of consumers. For example, digital, which has seen its use boost during Covid, has continued to integrate into our uses, and the same is true of the real estate ecosystem. Buyers and owners have very high expectations in terms of advice, support, ancillary services and trust. Startups understand this very well, and they also offer increasingly comprehensive service offers, and they manage to inject a new dynamism into their activity.
Insurtech is the ecosystem next door to the real estate ecosystem, and its offering is also evolving to offer products that truly meet consumers’ needs, allowing them to save money. there Lemoyne Law It is the best example of this, because it opens, since February 28, 2022, “the possibility of terminating and changing the borrower’s insurance at any time, free of charge”, thus becoming a tangible lever to circumvent the challenges of the moment, otherwise an alternative to saving money and regaining purchasing power for customers. Because separating it from credit can bring a lot of money, for example the possibility of acquiring additional square meters.
While 2023 remains a complex year from all points of view, it will mark the acceleration of the transformation of the real estate sector, which is also affected by pension reform. With the retirement age so far away, it’s a safe bet that the French will invest more in stone, in order to supplement their income.
[1] Source: Immobilier 2023: what future for the real estate market? | Kindness
[2] Source: Savings and Retirement Observatory
Tribune Posted by Taufik Josem, CEO and Co-Founder of Assurly
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