The notaries noted that real estate continues to be a "safe haven" despite the economic storms. According to the Notaires Insee index, old realty rose 7.3% in one year between April 2021-March 2022. A pace comparable to previous quarters.
The cloud that is gathering over the global economy due to the war in Ukraine, and the rise of interest rates are not visible in the figures made by the notaries. These figures are based on final sales for the first quarter. They were decided a few months ago. They did not see any indications of a decline in the next months. The volume of sales in this old sector, which has seen a boom since mid-2020, is actually stabilizing at an extremely high level with 1,175,000 sales in a single year.
[Release] Clues
Marc Cagniart (President of the Chamber of Notaries of Paris) stated that stone has been used more than ever by households as a refuge, security and in difficult situations. Houses have proven more successful than apartments since the end of confinement in mid 2020. Prices have also risen faster if you live further from Paris. Average house prices rose by 9.2% in one year and average apartment prices by 4.7% in one.
The success of new construction is also evident, according to figures released by the Ministry of Ecological Transition. Apartments are at 3.7%, while houses are at 7.1%. The prices of old houses and apartments in Ile-de-France increased by 2.5% compared to 9.3% in the provincial areas. Barbara Castillo Rico is the head of economic studies at Meilleursagents. She says, "It's an phenomenon of structural change of demand." She explains that "Following Covid, with democratization telework, there has been a wider choice of where households can be located."
It could also be a boost in purchasing power, which is the primary concern for the French, who housing is one their main expenditures. Thierry Delesalle is the president of the Notaries of Greater Paris' real estate statistics commission. He notes that in Ile-de-France there are more households taking the plunge. In Paris, the area of houses that are sold has increased. They are not bigger because they are larger, Me Delesalle said, but because attics are becoming more like garages and converted into living spaces.
Me Delesalle said that the rapid rise in interest rates could cause a decrease in the purchasing power for first-time buyers. This could lead to a counterintuitive effect on market. Does this affect the market? It doesn't. Even more, it has an accelerating effect. Everyone who wants to move in today's world tells you that rates are rising and they need to be moved quickly.
