Our optimistic forecasts for property rates in 2025
With significant variations in property rates between 2023 and 2024, 2025 looks set to be a year full of opportunities for borrowers and property investors. After a rapid rise in rates in 2023 followed by a lull in 2024, the horizon looks brighter and more promising. In this article, we explore the current trends, the determining factors and our optimistic forecasts for 2025. What scenarios could work in borrowers’ favour? Read our insightful analysis.
Contents
- A look at how rates will change between 2023 and 2024
- Outlook for 2025: towards more affordable rates?
- Determining factors for property rates in 2025
- Investing in 2025: wait or act now?
1. Review of rate changes between 2023 and 2024
The year 2023 saw a significant rise in property rates, from around 1% at the start of 2022 to a peak of 4.4% in December 2023. While this certainly put the brakes on many borrowers, it also marked the start of a transition. From 2024 onwards, rates fell to an average of 3.6% in the final quarter, reflecting an encouraging stabilisation in the market.
This dynamic has been facilitated by a slowdown in inflation and by banks’ favourable expectations of the European Central Bank’s (ECB) monetary policies. The successive cuts in key rates in 2024 reflect a desire to support a more balanced economic environment.
2. Outlook for 2025: towards more affordable rates?
2.1 A rise in rates in 2025: unlikely
Thanks to the slowdown in inflation (1.5% in September 2024), the ECB seems to have achieved its objectives without resorting to further increases in its key rates. A significant rise in property rates therefore seems unlikely in the short term.
2.2 A slight but promising decline
The most realistic forecasts point to a slight fall in property rates, with levels approaching 3% by the end of 2025. This would offer borrowers lower monthly repayments and better access to credit.
3. Determining factors for property rates in 2025
- The ECB’s monetary policy
Further cuts in key rates could encourage banks to pass on these reductions in property rates. - The international economic context
In the United States, monetary easing policies are already showing positive results, which could influence the ECB’s decisions. - Inflation under control
With inflation close to the 2% target, the conditions seem right for rates to remain unchanged or fall slightly.
4. Investing in 2025: waiting or acting now?
4.1 The benefits of lower rates
Going from 3.6% to 3% on a €200,000 25-year loan represents a saving of around 6% on monthly payments, a significant gain for households.
4.2 But beware of property price trends
A fall in interest rates could lead to a recovery in property prices, as observed from mid-2024 in some major cities. Paris, for example, recorded an increase of +0.5% between July and September 2024. Waiting too long could therefore reduce the benefits of lower rates.
Conclusion: 2025, a year of opportunity
The year 2025 is shaping up to be a good time to consider property projects. With interest rates likely to fall and prices still affordable, acting quickly could be a winning strategy. All in all, 2025 will be marked by a calmer economic climate, an opportunity you should seize to optimise your property investments.
Tip: Start preparing your application now and explore the opportunities, even if it means renegotiating your loan if rates continue to fall. Apply for finance online and let our experts help you realise your property plans.
