Expert Opinion in Real Estate Loans

Confidence in borrowing: a parameter that is too often neglected and yet essential to the recovery of real estate.

Confidence in borrowing: a parameter that is too often neglected and yet essential to the recovery of real estate.

While the year 2014 has just bowed, a balance sheet is needed.  New PTZ, interest rates at floor levels and prices of goods generally down over the year: will all this have an impact on the market? Based on real-life situations, figures and changes observed, Silver Fre brings his reading of a market that has reached a historically low level.

The figures speak for themselves, the revival of the real estate market will not have occurred in 2014. With 720 000 homes sold, the trend is globally stable compared to 2013, far from the 802 000 transactions recorded in 2011 The market therefore remains at a particularly low level, in which sales are mainly related to basic housing needs (housework, transfers, marriages, deaths, divorces, unemployment). So-called “comfort” purchasing decisions have been postponed. The lack of confidence in the economy, the ability of everyone to repay their loan, and, for sellers, the hope that the market will recover value, explain in particular the reserves found in 2014.

Although the market is generally sluggish, many micro-markets coexist and urban areas with a positive migratory flow see prices overall continue to rise.

In general, there is a greater demand from first-time buyers for properties located near or within urban centers, and particularly for those with high energy performance. Prudence guides the purchase of these homes, which seek to avoid a second car and limit their heating expenses.

The economic context and the plethora of goods plunge real estate into an economic logic of differentiating the price of a property according to its location and recent construction.

In terms of rates, the trend is expected to remain relatively stable in H1 at least. As the prudential rules of the banks have not been strengthened, individuals who were able to invest in 2014 will still be able to invest in 2015, for a property of the same value.
The main question is based, however, on the possible introduction of variable rates by banks in 2015. Deferred real estate projects in 2014, some of which could certainly materialize in 2015, would then be challenged by this very Anglo approach. -Fax and not culturally French.

The main hope must rest on a return of household confidence to borrow.

The main hope must rest on a return of household confidence to borrow.

Will it take place in 2015? I hope so but I doubt it. This would require positive signals for at least one semester: strong announcements and gestures, positive developments in terms of unemployment, indebtedness, signs of optimism in the media and society as a whole. Because the French want to continue to own but wonder about their ability to repay their credit in a context where the political will is not stable and legible in the long term, whether in the old or the new.

How can households consider building a long-term project while recent experience shows the immediate questioning of some of the laws governing real estate? The evolution of the zero-interest loan, the taxation of the capital gains regime, notary fees, property taxes, tax exemption laws: all these variables generate stress and uncertainty about the future.

Stable housing policies across governments are essential to give readability to households. Only a strong commitment from any political party on the subject would reduce household stress and restore confidence, thanks to long-term visibility.

Let’s stop seeing real estate as a tax adjustment variable with which we can play with impunity! This fundamental market must be respected, which has a direct impact on the building sector, which is an important part of the economy and generates added value. For this, a vision in the long term is essential.

Why not consider a real estate stability pact? Signed by all the political parties, it would give the vision to 10 years missing from households and formalize a strong commitment of consistency and readability, a key element to restore a much needed confidence!