Falling house prices increasing

Some professionals believe that 50% of reservations are subject to cancellation due to refusal to grant a loan.

The reversal of the real estate market continues month after month. The latest figures from the observatory Group Releases From Individual to Individual (PAP) on house prices former reported a monthly decline of 1.67% on apartments and 1.17% on houses. "Apartments like houses now worth less than a year ago, with a respective decrease of 2% and 4.80%," says the study. An observation shared by Era Immobilier, which reported in its network of a price drop of 8% over the first ten months of 2009.

Officials of the network also noted over the same period a decrease of 6% more for sale. "The French property market, which experienced a gradual decline since the beginning of the year, appears to have entered a phase of congestion in the past three months, including Paris, a city that was hitherto spared by the downward trend in prices, "noted for its part SeLoger.com in its latest monthly survey on house prices old.

The advance accumulated the first months of the year still allows the capital to display a price increase on a year rolling (+ 2.9%, with an average price of EUR 7562 square meters) *. It is also the case in Bordeaux (+1.1%), in Pau (+ 1.9%) and Troyes (+4.8%). But some large provincial cities are already in sharp decline. Marseille shows a decrease of 2.2% over one year rolling, Lyon and Strasbourg decreased by 1.7%, Toulouse is down 3.2% and prices sag 0.3% in Nantes. To explain these declines, professionals pointed to the deteriorating situation on mortgages.

Deteriorating situation in Vote

Some believe for example that in the new 50% reservations are subject to cancellation due to refusal to grant a loan. "The requirement of banks on credit terms requires sellers to revise their prices, explains Conjoncture of PAP. However, monetary easing from the ECB and the state should loosen credit. "

The value of real estate Montreal down

The economic slowdown could cause the rising vacancy rate office buildings in Montreal and a slight decrease in their value, according to Jean Laurin, President and CEO of GVA Devencore.

This would end a continuous rise in the value of real estate favorable to sellers of properties until 2008. Mr. Laurin believes that the owners patients will benefit from better prices when the economy will resume a normal pace of growth.

Slowdown of the occupation of offices

The vacancy rate in Montreal is 5.5%, while between 9 and 10% market balance in favor of negotiating buyers, "says Laurin.

He argues however that any layoffs could slow down the absorption of vacant, strongly linked to job creation.

Toronto has a vacancy rate of 6.8% and an average gross rental rate (including taxes and fees) of $ 45 a square foot. Montreal offers a gross average rental rate of $ 33 a square foot.

Large projects delayed

Over the vacancy rate is high, it is less advantageous for project developers to engage in new commercial buildings, "says Laurin.

Moreover, he added that some new construction projects could be delayed because of the difficulty of developers to obtain credit.

Former real estate: the increasing price decline since the beginning

France is almost entirely affected by lower prices. Of the 85 cities comprising the barometer Seloger.com, only a dozen displays an increase in October. In Nice, Montpellier, Bordeaux or Poitiers and Rennes, the value per square foot increased by 0.5 to 3%. But everywhere else, prices stagnate or fall frankly.

"Despite a structurally strong demand, a significant decline in transactions and an initial downward trend in prices" acknowledges Jean-Fabrice Mathieu, general manager of Seloger. Success of the strongest declines for the past three months: Metz (-3.53%), Arras (-3.22%), Limoges (-2.78%), Troyes (-2.60%) or Chalons - en-Champagne (-2.57%).

This wave of lower gains even Paris, where the average price calculated by Seloger fell by 0.2% during the last three months, 7 562 € per square meter. All districts fell even more popular as the 19th (-1.1%) and 20th (-0.7%). Only exceptions sectors prestigious Louvre (LVR) and the Eiffel Tower, where prices are often disconnected from the market, rose by a further 1 to 2% over the last three months. In the end, the annual rate of increase in the capital continued erosion from 3.8% in September, it is now 2.9%.

Prices also fell in Marseilles and Lyon, respectively 0.4% and 0.8% over the last three months. Again, the decrease is almost all districts. Month after month, falling over one year is starting to become sensitive -2% on average in the two capitals.

Those responsible for this slump: banks. "They lend much less to future buyers, thus depriving the real estate engine of its main fuel, credit," said Jean-Fabrice Mathieu. But the boss of Seloger is reassuring: "The phenomenon is expected to continue in the coming months but lower prices should not exceed 5 to 10% nationally."

Real estate boom after the crash ?

Missing our streets for years, the signs "for sale" refleurissent anywhere on the covers. Promoters do not know what to offer buyers: notary fees, kitchen, car, etc.. All these signs herald a reversal of trend, confirmed by the figures. Most indicators have moved from green to orange, if not red. In the former, for example, price increases in double figures are but a memory, and most observers forecast an increase zero or nearly zero by 2008. In addition, the forecasts are more openly pessimistic. Thus, Patrick-Michel Khider of Dairy and Bernard, co-chairs of Laforêt real estate, banking on a decrease of about 15% over 2 years. However, professionals anticipate more of a price correction that a market collapse similar to the 1990s. They argue that the offer is fueled by individuals who buy for housing or to invest, not by professionals of speculation. Another difference with the past, lower prices are not concentrated in the Ile-de-France. "We are moving towards a multi-tier prices could continue to grow or stagnate in the cities and on the Atlantic and Mediterranean, and lower in small provincial towns," predicts Philippe Stoltz, head of credit to the Habitat to BNP Paribas.
On the market for the old, build up stocks and prices do not move

In the past, signs of lower prices has often been the number of transactions, a decline that many professionals see now: according to the National Union of real estate professionals (SNPI), transactions have decreased by 13% between the 1st quarter 2007 and 1st quarter 2008. Over the same period, the Paris Chamber of Notaries has a "cold coup", with - 6.3% on sales of apartments in large ring of the Greater Paris - 9.8% in small crown, and -- 13.6% in Paris. And according to initial estimates, the decrease in activity would be even worse in the 2nd quarter. Corollary, property bring longer to sell - 8 months on average against 3 a year ago - and stocks are rising. "In spring 2006, I had 90 properties being sold, 2 years after I 215" is sorry Jean-François Buet, Speaker of the House Fnaim of Cote-d'Or. This weakness is due to the desertion of buyers for whom the sudden surge in interest rates decreased solvency, last year. In fact, until 2007, the surge in prices was offset by historically low interest rates and longer loans, sometimes reaching 25 or 30 years. But rising interest rates on long-term financial markets and the crisis of "subprime" (risk loans made to U.S. households) have forced since the summer of 2007, financial institutions rebuild their financial capabilities pulling up the rates at which themselves lend to borrowers. 4.35 to 4.50% in spring 2007 (without insurance), they reached 4.75% in autumn 2007 and now flirting with the 5%, a level that should stabilize until the end of the year. But the damage is done, and increase private credit less affluent buyers. And that, as banks have tightened the criteria for awarding loans. Seniority professional, personal, way of life or age of the family: they are assessed with great care. "We believe today the refusal rate loan at 25%, mainly among first-time buyers," says Guy Portmann, president of the France earth. As for creditworthy buyers, many different acquisition assuming a lower price, but due to a very uncertain global economic situation. "The classified ad in Le Figaro is an excellent barometer real estate ... I spent a Haussmann for an apartment of 120 square meters in a street pleasant sixteenth arrondissement, without mention of prices. Before such an announcement raised to 80 calls. Here, I do have one, "said Serge Bonamy, the real estate agency Bonamy.
The property premiums do not sell more

Expected by buyers who have reached the limit of their financial capacity, stagnant or falling prices is not yet supported by vendors. "At Dijon, buyers are looking for three pieces 150 000 €, but s'entêtent sellers to offer between 170 000 and 190 000 €," sighs Jean-François Buet. In the beautiful Parisian districts, "sellers are insisting on a range of 10 0000 to 12 000 € / m² while buyers are more willing to go beyond 9 000 € / m²," says Serge Bonamy. Previously, those assets premiums eventually be sold because, thanks to the continuing rise of prices, they will sooner or later the market level. But although this is no longer true, vendors are still waiting several months to review their claims on the decline. This wait is risky, because in the meantime the market could decline further, when costly and also the seller has acquired a new property before selling the previous one, by taking out a loan. On a loan of 200 000 € to 5%, wait 6 months to sell is almost 5 000 € plus interest, and € 10 000 after one year. Therefore, careful, many lawyers advise today to sell first and buy later.
Selective cuts on the horizon in 2009

Today, the property without flaw and offered for sale at fair prices continue to be sold virtually without negotiation and quickly, 3 or 4 months, sometimes much less. "In Paris, we sold in less than 15 days a loft of 675 000 € in the eleventh district and an apartment with terrace of € 1.4 million in the sixteenth. In the same district, a workshop artist has found takers in 48 hours. But it is true that we refuse systematically overvalued property. , "Said Nicolas Libert, founder of the agency Workshops, loft and Associates ... However, the market could tighten in the coming months, with fixed prices on certain types of goods or geographic areas "in Paris and Ile-de-France, for example, an apartment with defects - a ground floor Courtyard, for example - may fall by 10 to 15% on a year while the good quality standard will remain sluggish. In the provinces, poor housing could lose between 15 and 20%, and the conventional product stagnate or decline slightly, up to 5%. However, regardless of geographical location, the prestigious real estate should continue to increase by 5 to 10%, "says Olivier Bokobza, general manager of real estate space, a subsidiary of BNP Paribas. "When the market is uncertain, buyers prefer the blue chips," said Loic Hervé, director of housing at Gécina. Thus, rising fuel prices forced the housing eccentric and underserved should suffer more than those well placed. Similarly, the provincial towns where is the scheduled closure of a barracks, a hospital or a court will be among the first to see their prices fall. Specifically, unless you plan to acquire a prestige property - property seafront hotel, etc. - You have every interest not to rush you. "Today, buyers take their time and reflect a greater number of criteria: fuel, travel, school, etc.. "Says Komaroff Gwenaelle-Boulch, notary in La Chapelle-des-Fougeretz (35). Indeed, delay your purchase you will improve your bargaining power. For now, sellers are not inclined to cut prices, but the balance of power changed in a few months, especially if the property you covet is on the market long.
Promoters reduce their activity

The gloom also wins the properties for sale, with time to market increased from 10 to 12 months between May 2007 and May 2008. It whispers and in May, a major national developer has registered 11 reservations on its 40 programs, representing thousands of homes. Another, Kaufmann & Broad, broke new ground by putting up for sale on the site privée.com sale, specializing in the sale of major brands priced broken, 260 homes throughout France at a discount of 5 to 7% To "accelerate the start of marketing." Indeed, the number of homes available for sale (planned, under construction or already built) now exceeds 100 000, a level not seen since the crisis of the 1990s. Also, professionals wing reduce the number of building permits fell 15% in one year (April-June 2008/avril-juin 2007), and the starts of more than 28%. Most developers have created "disengagement committees" charged with eliminating, among current projects, whose viability is no longer assured. "For 18 months, on programs, we often reserve the option to cancel the transaction if we do not reach 30% of pre-ie bookings before the provisional date for starting the site , "Says William Truchy, Deputy Director General of Kaufman & Broad. "Rather than finding ourselves with a program unsold, we prefer to cancel the purchase of the land and pay the penalty to the owner of it," adds Gilles Bayon de la Tour, CEO of OGIC. As for banks, Guy Portmann notes: "some now require a rate of pre 50%, against 30% previously, to unblock the loans we agree."
The achievements of entry and high-end customer is always

However, as with the old, the new moves to a multi-speed market. The standard housing stocks accumulate in the cities where new construction - often intended for investors seeking défiscalisation - are plenty. Elsewhere, programs of good quality and well located continue to sell easily. Cogedim was recorded in the first four days of launching an operation standing in Garches (92), nearly 30 bookings on 140 homes for sale. In Hyères (83), more than half of Royal Palm Sea promoter of OGIC, located on one of the last land on the seafront, was commercialized in less than 6 months. The most expensive properties were sold first, some clients do not hesitate to invest over one million euros. With a more modest budget, the situation is the same in Troyes (10): the duplex the most expensive - about € 300 000 - that sold soon in a program of nearly 130 homes, marketed by Marianne Development. In contrast to the range of prices, programs of the National Urban Renewal (known areas ANRU) continue to sell well in Saint-Denis (93), Vaux-en-Velin (69), Vénissieux (69 ), Meaux (77), or in Grigny (91). Their buyers enjoy, according to resources, a VAT at 5.5% instead of 19.6% - which equates to 14% reduction in prices - and loans (PTZ) most important. A more interesting that, unlike the former, the price of new homes should not decline significantly in the coming months.
To stabilize prices of new homes

"In 1990, developers were forced to grant discounts of 15 to 20% in order to sell their housing stocks already constructed but empty, which is not the case today," said Emmanuel Parot, a financial analyst at Society Scholarship Gilbert Dupont. However, he "buyers are at the limit of their creditworthiness, so professionals will endeavor not reflected in their selling price for the additional cost of construction - from 10 to 15% - resulting from new requirements for energy saving and accessibility for the disabled. Professionals should rather cut back on their margins - around 11% currently - and negotiate the price of land, the main variable adjustment of the cost of a program. "The new land offered for sale are at prices somewhat lower than before. And whenever possible, we decline to renegotiate with vendors promises of land sales already signed, "said René Metz, president of Habitat Meunier. Therefore, if you plan to buy a good quality in the new, we should not expect lower prices in the months ahead. You may have to buy an ongoing program, including the building permit application was filed before 1 January 2007. After that date, in fact, the law of 11 February 2005 imposes new rules of accessibility for the disabled: area increased health clearances, and at least one chamber. An arrangement regret that some customers, which leads to a developer, under cover of anonymity, that such housing be lowest value them ...

The real estate market in the French Riviera appears to be stable

While the financial crisis and real estate wins the world, a "diehard Gallic region" remains: Cote d'Azur. In contrast to the 50% decrease in sales volumes seen on French territory, the market seems Riviera, he will maintain, not without worry the main players in the property sector.

The major operations have almost disappeared while nearly 35 000 sq m of office will soon be available ...
Sophia Antipolis: except

Nearly 60% of sales operations for new offices took place in the area of Sophia Antipolis, an advantage for the Cote d'Azur region, which allows it not to give in to panic ...

Even if, for now, the implantation of large companies is not provided, the property remains attractive and dynamic business. The global supply of Sophia remains, however, promising in terms of facilities available.

The building Directory Finance Holding, inaugurated last Thursday, is a brief example. It markets a business center (56 offices) dedicated professions including real estate and 4,000 m2 of office space for rent "music." Stay tuned.

"Subprime": the reasons for continuing crisis

The crisis of "subprime" continues to take a toll in the USA: it is estimated that each day between July and September 2700 Americans on average in 1200 against a year ago, have seen their homes before, because they can not cope to their monthly mortgage variable rate.

This figure shows that the measures taken by the credit industry and government have not helped many owners strangled by the subprime. The problem is far worse than many experts had predicted only a year ago.

More than four million owners had at least one month delay in repayment of their credit end of June, according to the Mortgage Bankers Association, and a record number of 500 000 were covered by a seizure.

Several reasons explain why the subprime crisis is so difficult to resolve:

-falling price of real estate:

A speculative bubble has inflated housing prices, leading millions of Americans to see their home as an investment rather than as a place to live. Today, prices dégringolent, especially in markets previously in vogue like California, Florida and Nevada. And the fall could continue another year.

The average price of housing in the United States declined at an annual rate of 9 percent in September to 191 U.S. $ 600, displayed down 17 percent from its peak, reached in July 2006, according 'National Association of Realtors.

Already 23 percent of owners have taken out a mortgage must repay more than the value of their homes, and this figure should rise to 28 percent in a year, according to Moody's Economy.com. If the majority will continue to repay their loans in the hope that the price is recovering well, others will throw in the towel, their leading credit agency to seize their homes.

-speculative investors:

The drop in prices had more impact on people who buy to invest. Less emotionally attached to a property where they live, they are more likely to stop honoring their credit. These investors were buyers of housing in five last year and almost one in three when the contract had its peak in 2005, according to the union estate agents.

Today, more than 30 percent of homes affected by a seizure are held by people living at another address, a sign that the property probably belong to investors, according to the company RealtyTrac.

-complex investment:

From the late 80s, Wall Street has found ways to turn mortgages into securities for sale to investors, who were attracted by the yield of these new financial products.

At the beginning of the decade, investors poured on the credit market. The mortgage risk and high interest rates - the "subprime" - were developed to obtain the amount of U.S. $ 600 billion in 2005 and 2006 instead of 160 billion in 2001, according to "Inside Mortgage Finance, a publication.

In this system, lenders have stopped worrying about the creditworthiness of borrowers, offering them ever more risky credits. And it seems hard to help borrowers in difficulty with this type of loan converted into a financial product. Their monthly credit are indeed divided among thousands of investors in the world, often reluctant to accept a substantial change in conditions of loans.

the loss of jobs:

No1 reason that explains why borrowers are in difficulty to pay their credit is the loss of employment or source of income, for example after a divorce or death of a spouse. Two years ago, 36 percent of refund arrears were related to a loss of income or unemployed, but that figure jumped to 45 per cent this year against a backdrop of rising unemployment in the United States.

-insufficient assistance to borrowers:

About one third of subprime loans whose terms have been modified in the third quarter of 2007 recorded again of late payments in the next ten months, according to a report by Credit Suisse.

The case of Maria Martinez, 57, administrative employee at the prison in Stockton (California), is typical of those owners who have been hand, but not enough: it has three months overdue repayment of a loan despite a relaxation of its credit terms earlier this year. She bought her house there are more than ten years to U.S. $ 76 000, but now must repay U.S. $ 230 000 because it refinanced its credit several times.

Until this summer, the interest rate on its credit stood at 8.5 percent. Under the amendment to its loan, it was reduced to 7.75 percent. Had she been eligible for more generous discounts, it would probably now in a better financial situation.

Crédit Agricole anticipates a decline in property prices French 15% by 2009

Since early 2008, the French property market suffered a sharp correction, according to a study by Credit Agricole. The volume of transactions fell 20% in the first half while housing starts fell 10% in the first quarter and 28% in the second. The analysts expect the bank green on lower prices by 5% in 2008 and 10% in 2009.

The situation is better in the former, where sales volume fell by 15% in the first half, economists believe Credit Agricole. The prices were a "continuous braking" since 2004, especially the houses (-5.9% on average per year).

In contrast, the situation is more worrying in the new real estate, where sales fell by 34% over a year in the second quarter, after a fall of 28% in the second. This is not strange, because prices continue to rise in this market. Accordingly, prospective buyers no longer have the necessary solvency in the eyes of banks to invest in stone.

According to economists at Credit Agricole, the correction should be continued in the French property sector, but should not attend a market collapse. The green bank has identified five factors of declining sales. First, it is a solvency constraint growing and is reaching its limits, on the other hand, it notes that the rental investments are less attractive than before. For the bank, those two factors are at work for about two years.

Avoid a "downward spiral marked"

But three most recent have a negative impact on transactions in the property sector. First, the current economic climate, made of uncertainty, strengthens the attention of potential buyers. Then, the tightening of conditions for granting credit and expectations of lower prices have a negative impact on demand.

Faced with this gloomy situation, analysts Credit Agricole remain calm. According to them, a fall in prices "gradual but significant" is expected in the coming months, but the European support to the banking system should limit the breaks. They feel "the market fundamentals rather favorable", who should avoid "a marked downward spiral".