Falling rates: renewed interest in high-end existing homes

Falling interest rates are rekindling demand for renovated properties in central areas, and selling times are getting shorter. Lower borrowing costs restore households’ purchasing power and once again make buying competitive with renting. Demand is concentrating on high-end existing homes that have already been redeveloped, where the buyer avoids the uncertainty of renovation work. For developers, this is the time to bring finished, well-positioned products to market, taking advantage of a window of renewed optimism.

The credit market confirms the picture: lending is recovering, banks are competitive on terms again, and mortgage demand is picking up, above all among buyers looking at quality existing homes in established areas. The effect on selling times is already visible in central micro-markets, where finished, well-priced products are moving quickly again. Negotiations are getting shorter, showings are turning into offers again, and the gap between asking price and sale price is narrowing.

Not all of the market benefits in the same way. Existing homes in need of renovation remain slower to sell, because on top of the price, the buyer has to take on a renovation whose timing and costs they do not control, and banks are more cautious about financing what is not finished. Product that has already been redeveloped, on the other hand, is easy to finance and sells better: this is why the gap between the two categories, rather than closing as rates fall, tends to persist.

The lesson of past cycles remains valid, however: windows of optimism reward those who prepared the product in advance, not those who improvise once the window has opened. A project started today to ride the moment will reach the market when conditions may have changed; a project set up prudently while the market was cold arrives ready when demand picks up again. The quality of execution, more than timing, separates the projects that finish well from those that stall halfway.

For buyers, the guidance mirrors that for sellers: falling rates do not lower high-end prices in established areas; they support them. Waiting for even better conditions makes sense only if the right property remains available, and on the most sought-after streets that rarely happens.

For developers who rely on debt financing, falling rates have a second effect, on the cost side: cheaper construction financing and margins that, with sale prices unchanged, have room to breathe again. Here too prudence remains the rule: a project that holds up only at low rates is a fragile project, and cycles have taught us that credit conditions change faster than buildings go up.

The overall message, for professionals and buyers alike, is to treat interest rates as one variable among several, not as the decisive one: the location, quality, and scarcity of the product remain the factors that determine value over time. The cost of borrowing changes the pace of the market, not the hierarchy of what holds value.