Despite the significant increase in mortgage rates, the residential market remained resilient with second-hand home prices staying stable versus Q3 2022[4]However, several metrics hint towards a slowing down of the individual buyer market as (i) trailing twelve-month transaction volumes as of November 2022 was 4% lower than as of September 2022 and 8% lower than the record activity seen in August 2021[5], and (ii) new-build reservations in Q4 2022 were 30% lower compared to the previous year[6]. The institutional investor market fared worst with a 42% decrease in transaction volume year-on-year during the quarter, leading to a 23% drop in volume for the whole year[7]. This liquidity withdrawal could lead to interesting opportunities in an asset class that benefits from strong fundamentals due to low upcoming supply and resilience to inflation.

[4] Source: LPI – Se Loger

[5] Source: Notaires de France

[6] Source: Ministère de la Transition Écologique

[7] Source: Immostat