Real estate, stabilization begins after 6 quarters of decline

According to the latest study published by the Ministries of Ecology, Territories and Housing, the real estate market in the third quarter of 2024 presents a mixed picture. While financing conditions improve and demand for credit increasesconstruction and employment in the sector continue to suffer, reflecting a still fragile recovery.

Borrowing rates noted on 01/13/2025

More favorable credit conditions boost demand

Financing conditions continued to ease, supporting a rebound in demand for home loans. Indeed, according to the study, the average fixed rate of real estate loans fell to 3.35% on a quarterly average, after having reached 3.47% in the previous quarter. At the same time, the 10-year OAT rate decreased slightly, from 3.05% to 3.01%.

Banks are reporting a sharp increase in home loan applications, a first in three years. The balance of opinion (difference between the proportion of respondents who expressed a positive opinion and the proportion of respondents who expressed a negative opinion) of financial institutions jumped to +67 pointscompared to 0 points in the second quarter.

The production of new credits also increased by 15%.reaching 35.3 billion euros. However, this production remains well below the averages of the last five years, as highlighted by the figures in the study.

Housing transactions and prices: signs of stabilization

On the old housing market, the survey notes a slowdown in the decline in transactions. Quarter-on-quarter, the decline amounts to 1.5%, compared to 4% in the previous quarter. However, with 780,000 transactions over the year, the market reached its lowest level since 2015.

Concerning prices, the ministerial study reveals a stabilization after six quarters of decline. In Île-de-France, house prices increased slightly (+0.4%), while apartment prices continued to fall (-0.3%). In the provinces, the decrease in prices remains moderate, with -0.2% for houses and -0.1% for apartments. Over a year, prices however recorded a drop of 3.9%more marked in Île-de-France (-5.3%).

The construction sector remains in crisis

Despite these first positive signs, construction indicators remain worrying. Still according to the same source, authorizations and construction starts are stagnating at very low levelsand sales of new homes continue to decline.

Even if the real estate activities turnover index grew by 1.6% in the third quarterit remains far behind that of all services, specify the data from the ministries.