Real estate: Marseille, Lille, Montpellier Nantes…, these cities where prices are climbing

The start of the school year confirms the market recovery

Certainly, prices have not changed over the past month (0% at the national level) but there is no reason to worry about the dynamics of the market. Quite the contrary… Because the worst is behind us and this stabilization phase only confirms it.

The market will nevertheless need a few months to digest the underlying trends initiated in the first half of 2024 (control of inflation, drop in borrowing rates, growth in income, etc.). Consequence: stone prices should still remain on a downward trend until the end of the year with a further decline of around -1%, these small variations are mainly explained by a seasonal calm in the market with an autumn that was still better than last autumn (-1% in Paris and -0.5% in France).

Price stabilization in major cities

To the point that the general price stabilization of the last thirty days constitutes good news in this respect. And, even more so in the major metropolitan areas of France. If, in the short term, the situation seems to be getting worse in the majority of the eleven largest cities in France (seasonal effect), it is paradoxically tending to improve compared to previous years. In detail, six of them saw their prices indeed fall (-0.2% in Nice, -0.7% in Rennes, etc.).

But these new downward variations are significantly weaker than those recorded at the same time last year. Thus, while the capital lost -0.4%, -0.6% and -1% respectively in September 2021, 2022 and 2023, this year it only observed a -0.2% decline. In this overall improving climate, only Lyon is an exception. With -1% drop since the last SeLoger / Best Agents barometer, the city experienced its worst September in 4 years.

Prices are rising in Marseille, Toulouse, Nantes, Montpellier and Lille

For comparison, its prices had only decreased during this same month by -0.4% in 2021 and -0.7% in 2022 and 2023. As for the remaining five municipalities in the Top 11, they even seen their prices rise since the start of the school year (+0,1% in Toulouse, +0,3% in Nantes, +0,4% in Montpellier and +0,6% in Lille). The prize for the strongest progress goes to Marseille which, with +0,9%continues its upward momentum that began eight months ago (+5% since February).

A general recovery but at several speeds

At the same time, the destocking of real estate supply continues. In other words, although the flow of goods remains constant in most of the major “Top 11” cities, the available supply is decreasing, which means an acceleration of transactions. This is particularly the case in Marseille and Nice, where the supply of housing for sale has returned to its 2021 levels (and even slightly lower in Nice for example). In these cities, demand remained relatively dynamic over this same period. The balance between stabilized supply and sustained demand has favored a rapid recovery in the real estate market and upward pressure on prices.

Conversely, cities like Nantes and Lyon experience very different dynamics. In Nantes, the supply almost tripled between 2021 and 2024, while in Lyon, it doubled over the same period. Although demand has increased slightly in recent months (+11% this year), it remains historically low, with a drop of -39% compared to 2021. This situation, marked by a sharply increasing supply and still moderate demand , led to a drop in prices in these two cities.

In these cities such as Nantes and Lyon, the rebalancing between the various market forces will take longer. Particularly affected by the contraction in real estate purchasing power since February 2022, they will have to face a slower recovery, with a rise in prices which will probably be spread over a longer period. The accumulation of stocks, a consequence of this contraction, will further delay the stabilization of the market.

Half the time needed to make your purchase profitable

+4 additional m² compared to December 2023

Wait a few more months or enter the market immediately? The situation is now much better. Real estate purchasing power tends to recover – as a reminder, the drop in interest rates associated with the reduction in prices and the increase in income has enabled buyers to acquire an additional +4 m² compared to December 2023. Furthermore, the improvement in household solvency, one of the vectors of renewed demand, makes the trade-off between buying and renting more obvious as rates fall and purchase prices increase. stabilize. It is therefore much simpler today to plan a profitable purchase in 7 years1 than it was 12 years ago.

The vesting period has been halved since September 2023

The reason? The duration, from which the capital accumulated during a purchase makes becoming an owner more attractive than remaining a tenant, has almost been halved since September 2023. In view of current prices and on the basis of a credit rate of 3.8%: 6 years and 1 month are sufficient today on average for a first-time buyer, with a personal contribution of 60,000 euros and taking out a loan over 25 years, to make the acquisition profitable. ‘a 50 m² all municipalities combined. Just a year ago, taking into account the rates at the time, this would take 11 years and 8 months. Furthermore, the element which also has a great impact is the economic projection over the medium term. Indeed, the dynamics of prices, rates, supply and demand suggest that the market will do better in the coming months, and that the investment will be even more profitable.

If the profitability horizon of a real estate purchase has been significantly shortened at the national level in the space of a year, this is also the case in large metropolises. Of the eleven largest cities in France, eight currently make it possible to make an acquisition profitable in less than 8 years. It is in Montpellier where taking the plunge into property quickly proves financially interesting. Buying is more profitable than renting in just 5 years and 10 months (compared to 12 years and 9 months last September). That is, barely four months less than in Lille (6 years and 2 months) and Marseille (6 years and 4 months).

Rates at 3% would allow the market to enter a new bullish cycle

To conclude, the positive tipping point lies in the more than realistic hypothesis of continuing to fall in rates to reach 3%. Enough to once again reduce the profitability period of real estate purchase versus rental and to attract more buyers to the market by making them solvent. This should allow the market to enter a new upward cycle within a few months.

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