Real estate prices continue to fall in major French cities. Only Paris is an exception.
In France, the real estate market is experiencing a fall in prices, a reassuring situation for buyers. Which cities have the lowest prices? Is now a good time to buy? Explanations and advice.
Large cities affected by the fall in real estate prices
The latest Barometer published by Meilleurs Agents and Se Loger highlights French municipalities which are seeing their prices fall. At 1is November 2024, sharp declines are noted in Lyon (-7.09%), Grenoble (-6.40%) and Nantes (-5.69%). In these metropolises which have benefited from the growth of the real estate market for several years, supply, which far exceeds demand, is pushing prices down.
Medium-sized cities are not left out. Le Mans, for example, shows a drop of more than 12% over one year while real estate prices are already among the lowest on the list (1,754 euros per square meter). In this city, demand still does not match supply. Other municipalities are affected such as Mérignac (-6.60%), La Rochelle (-4.80%) and Nîmes (-4%).
Prices rising in some cities
While apartment prices have generally decreased over the past year, as shown by the Barometer of the Meilleurs Agents estimator and the Se Loger advertising site, 22 of the 50 largest French cities are still showing rising prices. The largest increases concern the Côte d’Azur. Antibes recorded the strongest growth over 12 months (+4.21%) followed by Cannes (+3.66%), two cities boosted by tourism and the presence of numerous real estate investors.
Paris is one of the cities where the rise in prices continues, with an increase of 0.2% compared to the previous month and 0.8% over one year. More precisely, the neighborhoods where prices are exploding are 7th (+5% compared to the previous month) and on the 8thth district (+4%). Conversely, prices tend to fall in more popular neighborhoods: -1% in the 18th– 5% in the 19th-3% in the 20th arrondissement.
Gently sloping rates
More good news for those with a real estate project in mind: rates decrease slightly in November 2024. After significant drops in September and slight decreases in October, the downward trend in rates continues in November: -5 points of basis on all loan periods. The average rates are thus established at 3.45% over 15 years, 3.55% over 20 years and 3.65% over 25 years.
When credit rates fall, buyers’ borrowing capacity increases. It is therefore advisable to regularly evaluate this amount from a real estate project perspective.
Is now the right time to invest?
Obtaining a loan for the purchase of a primary residence has become more accessible thanks to the fall in mortgage rates. Banks, encouraged by falling rates, are more inclined to grant loans for higher amounts. They are likely to boost their business goals by the end of the year, creating plenty of opportunities for buyers.
The prices of goods, now falling or stabilized in most large cities, make the market attractive.
Consequently, all indicators are favorable to the purchase of real estate, especially since the market could start to rise again in 2025. Rather than waiting, it is advisable to seize current opportunities and call on a broker real estate to know its borrowing capacity. If rates were to fall in the following months, a credit renegotiation could be considered.
Despite these positive signals, inflation keeps the purchasing power of the French under pressure. It remains to be seen whether it is a real obstacle to purchasing.
Simulate your home loan
If you have a real estate purchase project, it is important to carefully calculate your borrowing capacity and the cost of credit. To do this, do not hesitate to use an online simulator, free and without obligation. You will need to provide: the amount you need, your income, the duration of the loan, the interest rate and the insurance rate.
After providing these elements, you will know the amount of your monthly payment, the cost of credit and your debt percentage. Remember that the maximum debt rate generally accepted by banks is 35%. Therefore, if your rate is higher than this threshold, you will necessarily have to lower the amount of capital borrowed, offer a higher personal contribution or more extensive guarantees.
