With the fall in credit rates, households have seen their real estate purchasing power increase in large cities over the last twelve months. Here is the surface area that you can now buy with 1,000 euros of monthly credit payment.
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Future buyers are finally smiling again. The real estate purchasing power of households, that is to say the number of square meters that it is possible to acquire with a monthly payment of 1,000 euros for a loan spread over 20 years at a rate of 3.35% in December, is up significantly over the last twelve months. On average, the French have in fact gained 6 square meters in the 20 largest French cities between December 2023 and December 2024, according to a study published by the broker Meilleurtaux. An improvement which is mainly explained by a drop in credit rates, which have fallen by around one point on average over the last twelve months, combined with a slight drop in property prices in the twenty largest French cities. “With the fall in rates, a household which has a repayment capacity of 1,000 euros per month has gained 13,000 euros in borrowing capacity over the past year», Comments Maël Bernier, spokesperson for Meilleurtaux.
In certain large cities where prices remain moderate, such as Le Mans, Grenoble or Saint-Etienne, households can purchase more than 10 additional square meters over the last 12 months, which represents an additional room. With an equivalent budget, a buyer can thus have an additional room or office in these cities at the end of 2024, compared to the year 2023. On the other hand, the gain in real estate purchasing power is logically more moderate in the cities where prices remain high and have fallen little in recent months, such as in Nice (+1 square meter over twelve months), or in Angers (+3 square meters).
An improvement planned for 2025
Although the real estate purchasing power of the French has been increasing for a year, it remains at much lower levels than in 2019, before the health crisis. Indeed, over the past five years, households have lost on average 21 square meters of purchasing capacity in the twenty largest French cities, a figure which even rises to 41 square meters in Toulon. “In 2019, buyers had better conditions with lower stone prices in the provinces and credit rates which were much lower than those currently practiced by banks.», continues Maël Bernier.
It remains to be seen whether this improvement observed in 2024 will continue in 2025. Good news for buyers, the fall in mortgage rates could well continue this year. “We are only receiving positive signals from banking establishments which are clearly renewing their desire to lendrejoices Maël Bernier. Rates could reach the 3% mark on average in the first quarter of 2025, for 20-year property loans“. Consequently, the real estate purchasing power of households could well increase again by a few square meters in the coming months.
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