The rise in long-term rates, which began at the end of 2021, was amplified by the ECB's rate hike in July 2022. In the wake of the rise in the 10-year OAT rate, mortgage rates have also risen rapidly. The rise in the cost of borrowing led to a sharp drop in the production of housing loans to resident households.

The sharp rise in interest rates and their high level severely eroded households' purchasing power, and the housing market continued its correction. Housing sales collapsed in both the existing and new sectors. Prices for existing homes adjusted with a delay. In the new-build sector, the squeeze on developers' margins - due to rising construction costs - has delayed the process of lowering house prices.

Between now and the end of 2024, sales are expected to stabilize thanks to an improvement in household purchasing capacity. In 2024, we anticipate a 7.9% drop in sales for existing homes. New-build sales (developer sector) are expected to reach between 50,000 and 60,000 units in 2024. Prices in the existing market should continue to fall in 2024, driven by a decline in transactions.