French Property Market 2023: Resilient Amid Challenges
Opportunities and Challenges Ahead
As we step into 2023, the French Property Market is facing some immediate challenges. Despite this, the market is set to remain strong and stable, with opportunities for savvy investors to navigate.
The Challenges Ahead
Inflation, rising interest rates, and tightening supply are the three primary challenges that the French Property Market is facing in 2023. While these challenges may seem daunting, a closer look at the market reveals that the overall outlook is positive.
The Historical Perspective
When viewed from a historical perspective, the French Property Market has proven to be resilient, even in the face of adversity. This is an important factor for investors to consider, as it suggests that the market is likely to remain strong over the long-term.
Stabilization in 2023
Despite the challenges, the French Property Market is set to stabilize in 2023. House prices are expected to grow at a slower pace, dropping below 5%. However, the number of property sales is likely to remain just above 1 million, making it a year of "soft landing" for the market.
Navigating the Market
For investors looking to navigate the French Property Market in 2023, it is essential to remain informed about market conditions, including inflation, interest rates, and supply. However, the stabilization of the market presents opportunities for those who are willing to do their due diligence and invest in properties with long-term growth potential.
Conclusion: As we look to the year ahead, the French Property Market is facing challenges, but it remains strong and stable. By staying informed and being strategic in their investments, investors can navigate the market and find opportunities for growth and success.
Cost of Living Pressures in France 2023: Managing Inflation and Energy Prices
Despite continued cost of living pressures caused by the Ukraine war and energy crisis, France has managed to keep inflation relatively low compared to other countries. With only 18% of its energy needs being imported, France has been able to weather the storm with massive state intervention to keep energy price increases below 4%. Although price controls will be lifted in early 2023, global gas prices have fallen below pre-war levels. While rising prices may affect the budgets of buyers, buyers are savvy about energy efficiency and government aid for insulation and heating conversions.
Rising Interest Rates France 2023: Mortgage Regulations and Dampening Consumer Debt
With mortgage interest rates expected to rise to around 3.5% in 2023, the French government has introduced new regulations to dampen consumer debt. New mortgage loans are now restricted to a maximum of 25 years, and the amount borrowed is capped at 35% of the borrower's income. While these regulatory changes may lead to a reduction in the number of house sales, rates will remain high compared to five years ago.
Shortage of Houses for Sale in France 2023: A Lack of Supply and Competition
In 2023, a lack of supply of houses for sale in France will insulate house prices and prevent them from sliding into negative rates, but it will also lead to a reduction of house sales. The shortage of supply is due to a falling number of new builds being constructed and people putting their homes up for sale. While the Covid-19 pandemic led to people moving from major cities to provinces in France, there is now a falling supply of houses for sale in places like the Herault and Gard departments in Southern France. With high land prices for new builds and construction material costs up 20% since the pandemic, people may prefer to stay put in their homes.