PARIS : A GAME-CHANGING CONTEXT

The impact of the rise in interest rates has led to a slowdown in the Parisian property market, now seeing a slight decline in prices. Vincent Moussion, Manager of the Villaret Immobilier agencies along with his brother, François-Régis, shares his view of the situation.

Buyers opting more frequently for a wait-and-see attitude, interest rates that are rising each month, an international context creating a climate of uncertainty…, all factors explaining the slowdown.

“We have gone from a very lively market driven by abnormally low interest rates to a “standard” market,” says Vincent Moussion. “The Parisian market is not blocked, demand is still there, nothing like the 2008 crisis, but buyers’ borrowing capacities are now limited, thus setting a brake on transactions. For example, in January 2022, a buyer under 40 with annual income of 85,000 €, could borrow 630,000 € over 25 years. As projected, in the second quarter of 2023, this same buyer can only borrow 450,000 €, ie. 28% less. The impact on the market is, of course, lower, though the decline is estimated at about 15% on prices for standard properties once interest rates have stabilized. Faced by these new parameters, buyers are split : they either choose to buy immediately before interest rates rise further, or they put off their acquisition, knowing that rates will rise but prices will fall. The market has become more hesitant, but once interest rates have stabilized, I think banks will lend more easily. Meanwhile, we owe it to ourselves as professionals to be as precise as possible when estimating property prices in order to sell within a normal period of time. Some sellers have a view of the market as it appears, but not of prices actually achieved, whence the importance of real expertise offered by estate agents. Another point to be stressed, the DPE (Energy Performance Diagnosis) is penalizing the market for rental investments. Since January 2023, apartments listed as “G”, whose final energy consumption is beyond 450 kg/m2 per year, can no longer be rented out, and those listed as “F” will be subject to the same sanction in January, 2028. The chance to pass on this important message : do not be afraid of an apartment with a low classification, solutions exist to improve energy efficiency and the work involved is not very expensive. Ask your agency to provide an energy anlaysis ; it will enable you to learn the extent and nature of the work to be carried out to comply with legislation.”

A family real-estate firm run by brothers François-Régis and Vincent Moussion, Villaret Immobilier was founded in 1996 in Le Marais and now has three agencies in Paris. Villaret Immobilier Marais, 97, rue Vieille du Temple, Paris 3 (01 42 78 17 20). Aligre, 2, rue Théophile Roussel, Paris 12 (01 87 89 82 00). Bastille, 35, rue de Charonne, Paris 11 (01 53 44 74 74). www.villaret-immobilier.com

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