Real estate market, between falling prices and recovery, where are we?

After a year 2023 marked by a sluggish real estate market, 2024 finally brings its share of clarity. The conjunction of two key factors gives oxygen to the sector: the reduction of interest rates and the readjustment of prices.

Real estate loan rates, now established at 3.45% on average over 20 years compared to 4.20% last year according to our figures, allowed new buyers to access property. This improvement translates into an increase in transactions of 7% across the entire territory according to the Laforêt network, with notable peaks in certain regions.

Borrowing rates noted on 01/15/2025

A general drop in prices

The year 2024 was marked by an overall decline in old property prices, although the decrease was less marked than in 2023. According to data from the Bien’Ici – BFM Business barometer, this trend can be explained by the drop in interest rates, promoting access to credit.

In the majority of large cities, prices show a significant drop. Strasbourg recorded a record decrease of 5.2%, followed by Grenoble, Nantes and Rennes (-4.8%). In Lyon, Montpellier and Marseille, declines vary between -2.8% and -3.8%. Conversely, Paris (+2%) and Nice (+0.7%) are exceptions with prices up slightly, due to dynamics specific to these markets.

In medium-sized towns, disparities appear. Reims saw a notable drop of 6.4%, while Dunkirk and Calais showed strong increases, of 7.4% and 12.6% respectively. These variations reflect local dynamics where demand remains determining.

A recovery in sales in small steps

Falling prices, combined with more favorable financing conditions, have contributed to renewed activity in the real estate market. Still according to Laforêt, the number of transactions increased by 7% on averagewith more marked increases in Paris (+11%) and in certain large cities (+5% in the regions).

However, this recovery remains measured. First-time buyers continue to encounter difficulties, particularly in setting up a personal contribution. The latter only represent 31% of buyers today. In addition, economic and political uncertainties are hampering a sustainable recovery, despite the efforts of the European Central Bank to reduce rates.

Sellers nevertheless seem to be adapting to this context. Negotiations, once rare, are now becoming a standard for finalizing transactions. This price flexibility could promote a gradual return to balance in the market.

Tenants still under pressure

While buyers benefit from improved market conditions, tenants face a more difficult reality. In two thirds of the cities studied, rents have increasedwith increases reaching 11% in Angers and Marseille. The rest of the coast is also affected, with notable increases in Toulon (+7.5%) and Nice (+6%).

Conversely, a few rare exceptions stand out, such as Paris, where rents fell by 4.2%, and Calais, which recorded the largest decrease (-11%). Nevertheless, these occasional drops do not compensate for the general upward trendwhich increases the burden on tenants.