Prices of new seaside real estate are starting to decline

Prices of new seaside real estate are starting to decline
Prices of new seaside real estate are starting to decline

After two years of soaring new property prices on the French coast, a downward trend finally seems to be starting. This is what the latest barometer from Find-un-logement-neuf.com reveals. Indeed, price corrections continue from one end of France’s coasts to the other. In detail, this highly anticipated barometer presents the latest prices and explains the reasons for this turnaround in the situation. A real breath of fresh air for buyers who may once again be able to realize their dream of a primary or secondary residence, with their feet in the water.

Summary :

Finally a drop in the prices of new real estate by the sea, beware of unsold properties!

Two years of exceptional increases on the coast

After the shock of the health crisis in 2020, the new seaside real estate market experienced an unprecedented surge in prices. In 2021 then 2022, the increases reached +9.8% and +10.2% respectively at the national level. A real real estate madness had gripped buyers!

> Consult our article on: “New property prices: developments in 100 cities in France”

New property prices are rising in most popular seaside resorts. This is the case for Le Touquet, La Baule, Arcachon and even Saint-Tropez. Thus, to afford a new 60 m2 apartment with a sea view, you would need to spend on average €390,000 at the end of 2022. That is, almost 25% more than before the pandemic.

Price levels that have become unsustainable

This unprecedented boom has its origins in several combined factors. First of all, the explosive demand from urban residents in search of space, calm and a pleasant living environment has largely contributed to this after successive confinements. Furthermore, many wealthy households wanted to purchase a second home by the water.

At the same time, very low interest rates and the glaring lack of available housing on the coast have also pushed new property prices sharply upwards. But, above all, the frenzied speculation carried out by certain unscrupulous investors and their massive purchasing strategies have burst a speculative bubble along the French coasts.

The plunge in sales signals the time for the first declines

A serious brake on sales

Reaching such stratospheric levels, many individual buyers have logically withdrawn from the market, no longer having the means to access property. Thus, sales of new housing by the sea suffered a serious slowdown in 2023. In fact, we observe average declines of -17% at the national level according to estimates.

Average price of a three-room apartment in a selection of 10 coastal towns

But, in certain sectors such as the Atlantic coast, the collapse in transactions even came close to -20%! Faced with this sudden drop in commercial opportunities, real estate developers had no choice but to lower their expectations to revive a market on the verge of asphyxiation.

Discounts of 5% to 10% depending on the stations

This is how since the start of 2024, the sales prices displayed in new programs have experienced their first real declines. According to the highly anticipated barometer from Find-un-logement-neuf.com, the discounts granted by developers depending on the resort range from -5% on sectors such as the Atlantic coast to -8 to -10% on certain very expensive portions of the Côte d’Azur.

With a clear slowdown in the rise in construction costs in recent months, these price adjustments could even become more pronounced. Indeed, if the trend towards a decline in transactions is confirmed, this dynamic of decline in price of new real estate could continue in the coming months.

Towards the absorption of unsold goods and a new dynamic?

These first drops in the prices of new seaside real estate are undeniably a real relief for buyers. However, the risks of oversupply and entry into a blocking phase cannot be ruled out.

According to the latest estimates, several thousand new homes remain unsold along the French coast. However, faced with these large volumes of unsold goods, developers will have no other choice than to continue their efforts on prices to absorb these stocks. It is at this price that the new seaside real estate market will be able to regain a new dynamic, healthier and in line with the real purchasing capacities of the different categories of buyers.

In the Var, for example, the situation is tense with nearly 10% of unsold goods over the last few semesters. Developers have already revised their prices downward by 6% to 8% on average on new programs such as the “Les Terrasses du Lido” residence in Le Lavandou.

An adjustment which is starting to have its effects, but which may not be enough given the latest reservation figures. The coming period will therefore be crucial for all players in the sector. Since they will have to demonstrate agility to put a little oil back into the cogs of the new seaside property market.

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