End of 2024: Is it the right time to buy?

After the yo-yo of real estate rates and a market in the midst of a crisis, one question is burning on our lips: is it really the ideal time to become a homeowner? Between falling rates, low property prices and borrowing capacity, we take stock with you in this article to help you see more clearly.

Between rising and falling mortgage rates

As you know, in mid-2022, mortgage rates rose exponentially, reaching the 4% mark at the end of 2023. This is a real break from the rates of around 1% that we had seen for several years, which has cooled many buyers and put their purchase plans on hold. 

This surge has also had a direct consequence for buyers: the loss of their borrowing capacity, i.e. the amount that banks agree to lend them according to their means. Worse still, some buyers found themselves unfinanceable because of ever-increasing interest rates. And the real estate market has suffered heavily from this situation.

But since the beginning of 2024, the tide has turned and we are seeing a gradual decline in rates. This is good news that gives buyers some breathing space and more confidence in banks, which are once again opening the doors of credit to those who were previously excluded. This downward trend is linked to the European Central Bank's (ECB) decision to cut key rates (the interest rates set by central banks for conventional banks) twice during the year.

Green light for buyers?

In 2024, and even more so since the start of the school year, it is the perfect time for buyers to make their projects a reality. What for? First of all, because rates continue to fall month after month, making borrowing more accessible and allowing you to gain square meters as these decreases.

But that's not all! Banks are now entering into real competition and relaxing their credit conditions. They therefore take turns embarking on "seduction" missions to attract borrowers. To stand out from the competition, they even offer time-limited offers, with various and varied advantages to make access to credit simpler. 

For those who would like to take the plunge and have their own house, now is the time to simulate how much you can borrow (to find out more, click here) and bring your real estate project to life.

Buying before property prices rise

When it comes to buying real estate, interest rates are not the only things to consider. The price of real estate is just as crucial. In 2024, to attract buyers, many sellers had to lower their prices. However, some have encountered difficulties in selling, due to a lack of potential buyers but also because some have taken advantage of the rate cuts to negotiate more than usual. 

Today, the context is much more favourable. Indeed, the lights are green for buyers: property prices have not yet started to rise, while rates continue to fall month after month. So with a reinforced borrowing capacity, you can consider larger or better located properties, because banks are ready to lend you more than a year ago. 

However, don't let this window of opportunity pass you by, because according to the predictions of professionals, prices will eventually rise again in 2025. So there are only a few months left before the market starts to rise again.

The 5-year rule

If you're still hesitating to take the plunge, here's an unstoppable tip: the five-year rule. What is it? To determine if this purchase is the right time for you, evaluate how long you plan to keep your property. In general, it is advisable to live there for at least five years to make the costs related to the purchase of real estate profitable.

Even if there is no law strictly speaking that governs this since you can stay as long as you want, this 5-year period is crucial to amortize the costs related to the purchase of a property (house or apartment, no difference). Indeed, if you sell quickly, you will not be able to make a sufficient capital gain in a few months. Whereas if you sell less than five years after the purchase, it is quite possible to make a capital gain, depending on the location of your property or the improvements you have made to it.

In short, several indicators show that now is a good time to become a homeowner. Between the drop in rates and prices that are still attractive, you have the opportunity to take advantage of very advantageous conditions. But before you start, ask yourself how long you plan to invest in the property you want to acquire.