House prices in France are expected to continue to rise in 2023, but at a slower pace than in recent years. The Notaires de France, the body of French property lawyers, predicts that house prices will rise by an average of 5% in 2023.
This is still higher than the long-term average of 2%, but it is a slowdown from the 7% growth seen in 2022.
The slowdown in house price growth is being driven by a number of factors, including rising interest rates and inflation. However, there are also some positive factors, such as strong demand from buyers and a limited supply of properties for sale.
Mortgages
Interest rates are expected to rise further in 2023, which will make it more expensive for people to borrow money to buy a house. However, the impact of rising interest rates on the housing market is likely to be limited.
This is because many people have already locked in fixed-rate mortgages at lower interest rates. In addition, the government has introduced measures to help first-time buyers, such as the “Prêt à taux zéro” (PTZ), which is a zero-interest loan.
Inflation
Inflation is also expected to remain high in 2023, which will put pressure on household budgets. However, the impact of inflation on the housing market is likely to be small.
This is because most people buy a house with a mortgage, which means that their monthly repayments are fixed. In addition, the value of houses tends to rise in line with inflation, so homeowners are not exposed to the full impact of rising prices.
Overall, the French property market is expected to remain strong in 2023. However, the pace of growth is likely to slow, as the headwinds of rising interest rates and inflation start to take effect.
Here are some of the key factors that will affect the French property market in 2023:
- Rising interest rates: The Bank of France has forecast that interest rates will rise to 3% by the end of 2023. This will make it more expensive for people to borrow money to buy a house, which could dampen demand.
- Inflation: Inflation is expected to remain high in 2023, which will put pressure on household budgets. This could also dampen demand for housing.
- Supply and demand: The supply of houses for sale is still relatively low, which is supporting house prices. However, the number of new homes being built is increasing, which could start to put downward pressure on prices in the long term.
- Government policies: The government has introduced a number of measures to help first-time buyers, such as the PTZ loan. These measures could continue to support demand for housing in 2023.
Overall, the French property market is expected to remain strong in 2023, but the pace of growth is likely to slow. The key factors that will affect the market include rising interest rates, inflation, supply and demand, and government policies.
