Real estate: a continued fall in prices, but insufficient for a real recovery

Written by The Meilleurtaux editorial team .
Updated

June 17, 2024 .
Reading time :
3 min

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Published on
Wednesday June 19, 2024 09:00
by the Meilleurtaux Editorial Team

Real estate prices continue to fall for the third consecutive quarter. If the drop has not yet reached the level hoped for by some buyers, it is now part of a clear trend, both in Île-de-France and in other regions. According to figures from French notaries and INSEE for the first quarter of 2024, old homes are selling for 5% less than a year ago.

A general decline in property prices

The fall in stone prices has deepened over the past 9 months, with a drop of 3.9% in the last quarter of 2023, after a decline of 2% during the fall. Nevertheless, Élodie Frémont, president of the real estate statistics commission and notary in the capital, believes that

This price reduction remains slow.

She mentions

A market that is still sluggish and does not anticipate a recovery in the short term.

Furthermore, she thinks that

The Olympic Games will push buyers to wait and see, which will slow down sales.

ImportantIn Île-de-France, for six quarters, prices have run out of steam, returning to their level of mid-2019 as of March 31 after a fall of more than 8% over one year.

Now, in 11 Parisian districts, the square meter is trading at less than 10,000 euros, and 7 others (2 more than in the previous quarter) show an average of less than 9,000 euros. Analysis of preliminary contracts allows us to conclude that Parisian prices will be relatively stable in the coming months. The square meter should therefore be around 9,370 euros (-7.6% over one year).

In the rest of the country too, prices fell by 4.2% over one year., after a previous drop of 2.9%. Combined with the recent decline in mortgage interest rates, it should encourage potential buyers to once again consider making their project a reality. However, more marked adjustments seem essential to really stimulate the market.

What rate for your project?

Continued fall in transaction volumes

Real estate activity continues to slow as a result. Over the last 12 months to March 31, the number of transactions fell to 822,000 unitscompared to 869,000 as of December 31, 2023 and 931,000 as of September 30, 2023. Me Thierry Delesalle, spokesperson for notaries of Greater Parisexpects to fall back below the 800,000 sales mark.

For these forecasts, it relies on volumes for the first quarter of 2024, which are down 24% over one year, and 40% over two years.

However, these professionals are hoping for renewed dynamism after the anticipated slowdown due to this summer’s Olympic Games. Some are counting in particular on a return to the market of housing acquired with a view to rental during this event.

A more marked decline for houses

On observe un greater gap between the fall in house prices and that of apartments, throughout the territory. In the Paris region, the prices of individual housing fell by 8.4%, while those of collective housing fell by only 7.9%. In the provinces, this gap is a little more pronounced, with respective decreases of 4.4% and 3.8%.

The increase in the cost of real estate loans has dampened the enthusiasm of the French for houses, which had nevertheless sparked real enthusiasm in the aftermath of the health crisis. According to Élodie Frémont,

The number of funding granted has decreased by 60% in less than two years.

Élodie Frémont

The Banque de France adds that the total outstanding amount of new loans distributed fell to 21.7 billion over the first three months of 2024, or 16.3 billion less than the same period in 2023 (-42%), and 34.6 billion below its level in the first quarter of 2022 (-61%).

Written by
The Meilleurtaux editorial team