Real estate agencies agree to speak of a “brightening” and “encouraging signs”, but they remain cautious in the face of a “fragile” recovery.
(AFP / PASCAL PAVANI)
The existing real estate market shuddered at the end of 2024 after two years of sharp declines in prices and the number of transactions. A purge which allowed the start of recovery at the end of 2024, according to professionals. After a catastrophic year 2023 and a still complicated first half of 2024,
real estate transactions have picked up over the past four months
according to several real estate agency networks.
In total, the Century 21 real estate agency network saw sales of houses and apartments increase by 2.8% last year, Orpi by 12% and Laforêt 7%. The National Real Estate Federation (Fnaim) for its part recorded 774,000 transactions recorded in one year at the end of October 2024, 11% less than the previous year. This
“historic low point” is nevertheless accompanied by “encouraging signs of stabilization” of the market
according to Fnaim. Laforêt measured an improvement in purchasing intentions with 11% more contacts recorded in 2024.
“We see encouraging signs coming from the cocktail
‘fall in interest rates, decline in prices, increase in negotiation margins’
“, according to Yann Jéhanno, president of Laforêt, “even if all the lights are not green”.
“The end of 2024 brought a welcome brightening” confirms Guillaume Martinaud, president of Orpi, but he prefers to “remain very cautious” because the recovery “remains fragile”.
On the price side, Fnaim calculates a decline of 0.8% in the average price per m2 in France in 2024, a “moderate” drop after -4.1% in 2023. Orpi notes that
prices per m2 fell by 5% at the national level
Laforêt by 3.6% and Century 21 reports a decline of 3.8% for houses and 0.7% for apartments.
The rise in real estate prices accelerated from 2020, driven by a surge in the value of houses, sought after after the confinements linked to Covid-19. Then the rise in interest rates in spring 2022 brought the old real estate market to a halt. In two years, the average price per m2 of houses has decreased by 5.6% and that of apartments by 4.1%, according to figures from Century 21, also noting that buyers have purchased smaller properties taking into account a reduced budget.
“A necessary evil”
“There are tensions in the market, prices have fallen, but it is a necessary evil,” said Charles Marinakis, president of Century 21. From now on,
“the machine is starting up again because prices have fallen”
according to him. The SeLoger-Meilleurs Agents real estate barometer, from the online ad platform and real estate valuation site, notes prices up slightly by 0.4% in 2024.
Concerning buyers, first-time buyers, whom some real estate agencies saw returning to the market in September, “are struggling to build up a sufficient personal contribution” and only represent a third of transactions according to Laforêt. Rental investors have turned away from the old real estate market. Their share of transactions has decreased over a year, according to Century 21 and Laforêt.
Optimistic for 2025, SeLoger-Meilleurs Agents believes that “the market should experience a tipping point in the spring with a recovery in demand” likely to revive real estate sales. More measured, Fnaim predicts that “the market recovery will depend on many factors:
a possible drop in interest rates, the geopolitical context, and future political directions.”
The “real enemy” of the recovery of the real estate market, according to Charles Marinakis, would be that prices start to rise again. For him, “the fall in prices is over in 2025” and if they increase “beyond 3%, we risk returning to a situation of blockage” of the market.
Diagnosis shared by Guillaume Martinaud, from Orpi:
“We must continue our educational efforts as intermediaries”
to prevent sellers from raising their prices. He “hoped for a drop of 7% to 8% in prices” and considers “that we are only halfway there. A recovery in prices is not desirable because it would break the dynamic again”, explains -he.
