Property: adapting your purchase project to the evolving rates!

The property market has been subject to over a year of unprecedented change, with mortgage rates significantly up again after several decades of decline, a usury rate that adapts step by step and not always quickly enough, and credit applications from many households being refused, due to increasingly restrictive bank assessment criteria.

Solutions can however be found, which do not necessarily involve putting off a purchase or compromising on housing quality. While revising one’s budget downwards is often necessary, choosing to live in a city with all amenities but more moderate property inflation can prove a winning bet. We set out below some ideas, the best places to buy more cheaply in France.

The usury rate, above 4%!

Since February 2023, the usury rate has been reviewed monthly to closely follow market developments and meet borrowers’ needs. Thus for April 2023, the applicable usury rate ranges from 3.72% to 4.24%, depending on the loan term.

This demonstrates the continued rise in rates, and is good news for borrowers whose credit applications were recently refused due to too high an APR (Annual Percentage Rate).

Mortgage rates continue their ascent

For the fifteenth month in a row, the rates at which mortgage loans are granted are increasing. From 1.03% in February 2022, the average rate (without loan insurance) for a 20-year mortgage now stands at 3%, the level seen at the end of 2014.

It should be noted however that the acceleration in the rate surge observed since early 2023 suggests that banks are increasing their rates in line with the usury rate, rather than the other way round. Thus mortgage rates, which rose by an average of 11 basis points during 2022, gained 26 points in January and 21 points in February 2023! And the trend, unfortunately for borrowers, shows no sign of weakening.

This continuous increase directly affects the property purchasing power of households forced to review their strategy - or their expectations. Extending the loan term is not always the best solution, all the more so as the usury rate is the same when borrowing over 20 or 25 years and remains an annoying barrier when the 25-year rate is higher.

Reducing comfort is not to everyone’s taste, but if the budget is too tight, it remains possible, to access a property that better matches expectations, to change city!

Buy better, more cheaply, elsewhere in France!

If you are looking for your new haven of peace or a place to invest, be aware that certain regions or cities in France offer properties for sale below the national average, yet are not lacking in attractiveness or charm. Here is our selection.

5 regions to live or invest without breaking the bank

Whether your wish concerns the city or the countryside, certain regions offer surprising property opportunities at affordable prices. Consider therefore moving to:

• Auvergne, the cheapest region in the country. It is quite easy to find a house there for under €100,000 although obviously, certain towns and their surroundings have seen prices rise in recent decades due to their attractiveness. If living in the countryside appeals to you, don’t hesitate to direct your search there.
• Pays de la Loire, which also has a price per square metre below the national average overall: around €3,700 for a flat for example (compared to €4,337 nationally). Prefer medium-sized towns like Saumur or Laval for a property investment: their attractiveness is clearly increasing while price levels lag behind the change.
• Rhône-Alpes region is an excellent alternative for investing, if you avoid the Lyon metropolitan area with its obviously high prices. The differences are large and you will need a budget of between €1,850 and €3,762 per m² for buying a house, or between €2,650 and €5,119 per m² if it is a flat. For reasonable prices, head to Saint-Étienne and the surrounding villages.
• Limousin, which has lower economic attractiveness than most other regions, also offers good property possibilities. It is possible to become an owner of a house there for an average budget of €1,160 per m², or a flat for an average price of €1,600 per m².
• Finally, Alsace appears as a highly urbanised region with significant property potential, particularly suitable for investing. The purchase price of a flat averages €2,762 per m², which is still €1,500 less than the national average.

10 large French cities with reasonable property budgets

To conclude, here are for city dwellers some large cities that combine significant economic and/or cultural attractiveness with affordable prices:

• Saint-Étienne,
• Besançon,
• Mulhouse,
• Bourges,
• Limoges,
• Poitiers,
• Châteauroux,
• Clermont-Ferrand,
• Metz,
• Belfort.

Other places are worthy of attention and we could have added Brest, Perpignan or even Angers, recently voted among the most pleasant cities in France, to our list. Now it is for you to broaden your horizons, to imagine the property project of your dreams!