2015 real estate rate forecast

2015 real estate rate forecast

The financing conditions have steadily improved with an average interest rate successively beating all records. Regarding January 2015 borrowing rates, the trend is downward and is expected to continue in the coming months. It will therefore always be very interesting to realize a real estate project as renegotiate his credit immo.

Will prices continue to decline?

Will prices continue to decline?

There is no major change from 2014 that would push prices up in 2015. And we can predict a decline in property prices. If interest rates stop falling, then the price impact could be significant. To summarize, it is likely that in 2015 real estate will see a decline in prices throughout France.

Simulation, Quote and Comparison of Credit Insurance

Simulation, Quote and Comparison of Credit Insurance

Changes to real estate for 2015

In 2014, some regulatory improvements were introduced as tax changes.

Increase in the property tax on building land

It is most certainly the tax changes on building land that will have the greatest impact on the real estate market. The property tax on unbuilt property will explode in 2015. Indeed, the State has revalued the rental value of this type of property by 25% with an additional € 5 per m2.

All building plots in a “tense area” are affected. Regarding dwellings outside tense areas, it is the municipality which will apply an increase ranging from 0 to 3 € per m2 of building land. It has also been introduced by the government an exceptional reduction of 30% on capital gains real estate until December 31, 2015.

2014 Real Estate Trends

2014 Real Estate Trends

It is still very early to take a clear view of the fall in real estate prices for the year 2014. For the moment, there is no other definitive value than the statistics for the first quarter of 2014. For this date, real estate prices fall overall by 1.9% year-on-year.

For the 2nd quarter, on the basis of non definitive figures, the ENCEE notes a decrease of -1,3% over one year with almost the same variations for the houses (-1,3%) and the apartments (-1, 2%).

For the 3rd quarter, the figures are intended to be provisional. We can only see a stronger downward trend in prices for apartments than for houses.

It’s been three years now that real estate prices have been declining overall. Since the 3rd quarter of 2011 and up to the 2nd quarter of 2014, the index of ENCEE on prices of the old property has varied downward from 110.5 to 105.6, an average decline of 4.4%.

At this price drop, it is also necessary to add the impact of inflation. This is an average of 4.2% between the 3rd quarter of 2011 and the 2nd quarter of 2014. Prices have thus decreased by 8.3% in just 3 years.

Also, in order to fully understand this downward cycle, we must take into account the impact of other factors weighing on the prices of real estate. During this period, the borrowers did not have the benefit of identical financing terms. Credit rates decreased by 158 points, which is equivalent to a price decrease of 14.5% according to Crédit Logement’s results.

If we add up all this, we see a decrease in prices of 8.3% and a significant improvement on mortgage rates equivalent to a price reduction of 14.5%. The overall decline is therefore 22.8% in just 3 years!

 

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