- Details
-
Published on
by the Meilleurtaux editorial team
The real estate market is currently not in its best shape. The context is particularly harsh for potential buyers, with galloping inflation and rising interest rates. While the main residence market is showing some resilience, the rental investment market continues to decline. Regarding real estate purchasing power, seniors are the best off.
The noose is tightening even more for young people and rental investors
There was a time when rental investment was one of the favorite investments of the French. It must be said that at that time, obtaining a mortgage was easy. The banks have even gone out of their way to seduce customers. They used credit as loss leader to attract customers and then offer them other more profitable products or services.
Today, the situation is quite different. Banking institutions are now less inclined to lend and have therefore tightened their granting conditions. At the same time, real estate rates resumed their upward trend. In just one year, the average rate over 20 years has gone from 1.4% to 2.8%.
For rental investors, the main difficulty is to convince the banks to finance their project, especially since, in the vast majority of cases, the project must be financed up to 110% (to meet the various costs).
Young people find themselves in an almost similar situation. This time, obtaining financing is penalized by the lack of contribution.
ImportantFor all these reasons, the market is mainly driven by seniors (50 years and over), who represent 59.7% of buyers. This category of buyers has a higher real estate purchasing power, because many of them are already owners and can count on a bridging loan to finance their purchase project.
What rate for your project?
New: certain assets, but now almost inaccessible
Today, the main qualities of new homes are also their biggest flaw. With this type of acquisition, buyers no longer have to worry about possible rehabilitation or upgrading work.
But the use of “latest generation” materials quickly drives up the selling price and makes new homes practically inaccessible, except to the wealthiest.
- The tightening of the conditions for granting mortgages penalizes buyers, especially young people.
- Rental investment attracts fewer and fewer French people, due to the difficulty of finding financing.
- The real estate market is mainly driven by people in their fifties, in particular that of new buildings.
