EXCLUDED EUROPE 1 - Real estate: more than one in ten French people intend to buy in 2023

Yanis Darras 12:36pm, March 28, 2023

Would inflation thwart the real estate projects of the French? Not really! More than one in ten French people (14%) say they intend to buy a property during the year 2023, according to a latest OpinionWay survey for Laforêt Immobilier, which Europe 1 was able to consult. The only downside is rising interest rates, which could slow down the market.

In fact, 26% of those surveyed who want to buy this year are aged 26 to 34, while they are only 6% among those aged 65 and over. The intention to buy is also stronger depending on the geographical location. Thus, more Ile-de-France residents want to take the plunge than in the rest of the country, and especially Parisians, since 32% of respondents living in the capital intend to become homeowners this year.

Rising rates curb cravings

Only shadow on the table: the rise in interest rates on mortgages. Still low a few months ago, the latter have risen significantly in 2022, to reach 2% in the long term. The banks' primary objective is to slow down inflation. But for potential buyers, these increases push to rethink or even postpone their purchase.

Thus, while rates continue to rise, nearly 68% of French people would question their real estate project, as soon as rates reach or exceed 3%. Worse, 81% of people with a real estate project for the year 2023 could simply give up their purchase for this reason.

The increase in rates will have an impact in particular in areas where real estate prices are historically high. Thus, 75% of Ile-de-France residents wishing to buy this year could pause their project. Couples with children are also the most affected by the possible further rise in rates.

The impacts should quickly be seen on the market, since on March 17, the average borrowing rate in France over 25 years, was estimated at 3.05%.