With rates on the rise, are we headed for a two-speed real estate boom in the region?

More expensive debt, demanding banks retort files, binding rate wear, continued imbalance between supply and demand, high prices: become a home owner in the former Languedoc-Roussillon will be more difficult in the future.

Should we be concerned about rising interest rates, the health of the real estate market and the ability of households to access property? Tensions are confirmed in a sector that has so far been growing, especially in the former Languedoc-Roussillon.

By raising its key rates on Thursday, July 21 for the first time since 2011, in response to galloping inflation, the European Central Bank confirmed the end of a long period of easily accessible money. Historically low, with an average of 1.06% last December, rates have been rising ever since. In a semester, they increased by 0.4 to 0.7% depending on the banks and the trend will continue.

More pushy bankers, more refusals

Result: harder access to credit for individuals. A more marked search in the former Languedoc-Roussillon, where purchasing power is less, where Real estate prices remain high and properties for sale are scarce. With, in the list of the most attractive cities, Montpellier and Sète, followed by Narbonne, then Nîmes and finally Béziers, Carcasonne and Perpignan.

“Bankers continue to lend but are becoming more demanding in profiles, explains Laurence Deschatrette, a broker who has worked for 15 years in the Montpellier market. We are starting to have refusals, especially for investor profiles , or for insurance problems. for the elderly. . Even 40-45 year olds with no health problems and good records find themselves facing problems again”.

Concerns for buyers without contributions

Because another phenomenon affects the market: the rate of wear, to protect buyers. The basis of the total cost of credit (including interest, loan insurance, guarantees, administration costs and intermediation) beyond which the bank can no longer grant credit, it is set every quarter by the Banque de France. However, its increase, which was limited to the period of its renewal on July 1, was not related to the increase in interest rates observed, which led to the denial of the loan.

“At the moment, the files go through because the bankers need contributions from customers. But in the next six months, there will be a mismatch between the borrowing capacity and the market prices”, warns Laurence Deschatrette. “A good file three months ago is no longer good today, added Dominique Pellier, real estate agent at ArthurImmo. A whole section of our population, without contributions, will soon not be able to buy . This is the paradox of a poor region like ours, with high prices, many buyers, few properties for sale and banks that apply extreme conditions. to the rich and to those poor”.

Towards discrimination in access to credit?

However, the weather remains favorable for buying. Even if they exceed 2% at the end of the year, credit rates remain affordable, far from the rates of 3% in 2014, 6% in 2001 and a fortiori from … 16% in 1980, after in both oil vibrations.

And they stay below inflation. “We are still in a dynamic market in the region”, analyzed Jérôme Feriaud, president of the Chamber of Notaries of Gard, who noted an increase in the number of transactions in the first quarter, more compact since April- May, like the prices. “Everyone is very attentive to what is next. We are heading to a time when the real estate market will not improve much”, he added, referring to “discrimination in access to credit when the rate of wear and tear cannot be removed”.

With a large number of second homes, Hérault and Pyrénées-Orientales leading, the former Languedoc-Roussillon may not be a great region for future owners. “In 2007, the candidate Sarkozy said he wanted a France of the owners, remembers Bertrand Malquier, president of Fnaim Languedoc-Roussillon. Now it is a utopia. The market has developed much faster than household purchasing power. And with the increase in interest rates … “

Until the end of the price increase

After the first half of 2022 marked by a slight increase in prices in the former Languedoc-Roussillon, the curve is bent. “The rise in prices is over, says Bernard Malquier. In the last few weeks, we have observed a slowdown in the increase. The disinflation should accelerate. We will not have a strong increase like in 2020 and 2021, except for Sète “But prices remain at a high level, sometimes up to €8,000 per square meter. They should stay there as long as the supply is higher than the demand.

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