A timid stabilization of prices in old real estate and declining transactions

Written by The Meilleurtaux editorial team .Updated on
December 13, 2024 .
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Published on
Friday December 20, 2024 11:24by the Meilleurtaux Editorial Team

The old French real estate market is experiencing an inflection point with the stabilization of prices, thus marking the end of a prolonged downward trend. However, the persistent contraction in transaction volumes reflects a market still under pressure. This text explores recent dynamics in the real estate market, focusing on the factors behind this slowdown and the outlook.

A gradual decline in prices

Analysis of data from the Notaires-Insee index reveals an attenuation of the downward dynamic in prices of old housing in the third quarter of 2024. After a prolonged period of depreciation, real estate prices recorded a contained decline of 0.1%, suggesting a possible stabilization of the market.

The results for the third quarter reflect a reduction in the dropouts observed previously. Indeed, unlike the contractions of -1.5% and -1.8% recorded respectively in the first and fourth quarters of 2024, the decrease in prices has moderated. This dynamic is also verified over a rolling year, where the decline slowed, going from -5.2% to -3.9%.

The phase of decline in old property prices continues, although less pronounced for five consecutive quarters. This relative stabilization could indicate a market bottom, but does not necessarily foreshadow a vigorous recovery. The prospects for recovery therefore seem mixed in the short term.

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Diverging trends depending on the region

Changes in old property prices show notable disparities depending on the region. While Île-de-France experienced stabilization (-0.1%) in the third quarter of 2024 after a prolonged correction phase, the other regions continued to experience a decline, even more marked since mid-2023. Rural areas and small towns are particularly affected by this phenomenon.

Although this phase of consolidation seems to have taken hold, the market remains subject to high volatility, influenced by local dynamics.

Stalled transactions

Notarial data adjusted for seasonal variations indicate a continued decrease in the number of sales since the end of 2021, reaching a low of 780,000 units over twelve rolling months.

The collapse in transaction volume is also reflected in the types of goods affected. Houses and apartments saw their prices decline in a similar manner, by -3.9% and -3.8% respectively over one year. This market contraction could be explained by a deterioration in the climate of household confidence, induced by the rise in mortgage interest rates and the erosion of purchasing power, particularly for first-time buyers.

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