Old property prices continue to fall – 05/28/2024 at 1:13 p.m.

Old property prices continue to fall – 05/28/2024 at 1:13 p.m.
Old property prices continue to fall – 05/28/2024 at 1:13 p.m.

The real estate crisis is well anchored in France and prices of old real estate continue to fall after three years of soaring following the Covid-19 crisis, with no lasting improvement on the horizon.

In the first quarter of 2024, old property prices continued their erosion compared to the previous quarter, falling by 1.6%, compared to -1.8% in the fourth quarter of 2023, according to the Notaries-Insee reference index published Tuesday.

The trend is even more obvious over one year (-5.2%), with a drop of 5.5% for apartments and 4.9% for houses, according to provisional data adjusted for seasonal variations.

After a continuous increase since the end of 2015, prices in old buildings have been plummeting since mid-2022.

In Île-de-France, they decreased over a quarter for the sixth consecutive time (-2.6%). The drop is more marked for houses (-3.2%) than for apartments (-2.3%), unlike the previous quarter.

“We are witnessing not only a real estate crisis but a housing crisis which is well anchored,” commented Elodie Frémont, president of the “real estate statistics” commission of notaries of Greater Paris, during a press briefing.

The cause, according to her, is the continued deterioration of the solvency of buyers with interest rates which remain very high, and a wait-and-see attitude on the part of sellers who do not agree to lower their prices.

According to the notaries, the very first relaxations on rates and the announcement of easier access to credit were “very widely publicized”, but the immediate improvements were “very modest”.

According to the Banque de France, 21.7 billion euros were loaned to households in the 1st quarter of 2024, compared to 38 billion in the 1st quarter of 2023 (-42%).

“The market is in the process of correcting itself from its excesses to reach a plateau at the end of this financial year, which would perhaps make it possible to consider a start in 2025,” however estimated Loïc Cantin, president of the National Federation of real estate (Fnaim).

– Wait-and-see attitude –

“We are starting to see buyers coming back but there is still inertia and it will take time to translate into sales,” declared Corinne Jolly, president of Individual to Individual (PAP), who expects that sales volume and prices “continue to fall until the end of 2024”.

In the first quarter, sales volumes in existing properties fell by 24% in Ile-de-France and by 40% in two years, according to the Notaries of Greater Paris.

This “historically low floor” led to an 8.1% decline in Ile-de-France prices over one year, i.e. the level of mid-2019.

“The markets which have experienced the greatest increases are the markets which have corrected the most, and Paris is one of them,” commented Loïc Cantin.

Between now and July, Ile-de-France notaries predict a stagnation in prices for apartments and an increase for houses, a “trembling” which according to them is not likely to stem the crisis, especially since the Olympic Games should also provoke a form of wait-and-see attitude.

“With the collapse of production in new buildings and the strengthening of constraints in old buildings”, the current crisis “opens up the prospects of a more general deterioration in household housing conditions”, they underline.

In Paris, the price per m2 reached 9,490 euros in the first quarter (-7.9% over one year), compared to 10,860 euros at its highest in November 2020.

Eleven districts of the capital now display average prices per m2 below the symbolic bar of 10,000 euros and seven districts at less than 9,000 euros, compared to five the previous quarter.

In the inner suburbs, Montreuil (Seine-Saint-Denis) sets the record for the fall in apartment prices over one year (-11.7%) and Champigny-sur-Marne for houses (-21.8%).

In the provinces, the decline eases over a quarter (-1.2% after -1.9%) but increases over a year (-4.2% after -2.9%).

As a direct consequence, the number of transactions carried out over the last twelve months continues to fall to 822,000 at the end of March 2024, after 869,000 at the end of December and 931,000 at the end of September.

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