Paris: in 2024, real estate prices plunge below pre-COVID level

With the drop in rates, this fall 2024 stands out with an increase in purchase searches (+ 4.9% nationally vs. 2023), the first in two years. But on the other hand, Paris still shows declining figures (- 3.6%).

A real estate price well below €10,000/m² in 2024

The specialized press insists on Paris and rightly so: this is the region where prices have fallen the most this year (-7.3%). Same for Île-de-France. It was indeed difficult to imagine that Paris could one day go back below the symbolic bar of €10,000/m². It’s done. Today the capital has an average price of €9,450/m², which is back to the level it reached in 2018/2019. This drop in prices is mainly due to the credit crisis which has been taking place for two years.

???? With the sudden rise in interest rates (going from 1% to just over 4% in two years)acquiring a property in Paris has become significantly more difficult, Paris already being a region where prices were among the highest.

Evolution of the average real estate price in Paris

Paris, a real problem of attractiveness

In addition to the funding crisis which has been national, Paris has suffered from a loss of attractiveness since the pandemic. Indeed, the Covid-19 pandemic has changed the aspirations of the French and their way of working. Quality of life is now at the heart of their concern, especially among young people. In 1990, 60% of French people considered work “very important” in their lives. There are only 24% left today.

Due to the cost of real estate, first-time buyers confine themselves to small areasoften far from their workplace, which does not promote quality of life.

???? In addition, the development of post-Covid teleworking has allowed many Parisians to move away from the centerpreferring peripheral towns or even less dense regions, where real estate prices are more affordable and the quality of life better.

Finally, the investors are also more cautious. Faced with this uncertainty about the future of the Parisian market, many prefer to wait for prices to stabilize or even rise before repositioning themselves.

What future for real estate in Paris in 2025?

The gradual reduction in rates, generated by the ECB’s policy, is already having positive effects on the real estate market. This decline is also expected to continue, with inflation falling significantly. Translation :

• more buyers will return to the market, encouraged by this drop in rates to resume their project;
• buyers with greater financial capacity.

In fact, interest rates are increased from 4.20% in December 2023 to 3.50% in October 2024. All buyers are also aware that the unprecedented rates practiced two years ago (1%) belong to the past. All this should play a positive role on the Parisian market, and in the long term we will certainly see a stabilization of prices.

???? Some results already encouraging

Analysis of the 100 best summer ads in Paris shows very encouraging results. On average, these ads received 26 contacts, with a displayed price of €9,734/m². Studios (47%) and low energy performance housing (32%) are widely represented there, attracting many buyers thanks to their competitive prices.

And in the next 10 years?

The city of Paris will maintain its supremacy over key sectors of economic and political life for as long as real land use planning policy will not be implemented. A territorial planning policy is also one of the keys to solving the housing problems of the French; and this involves rebalancing demand by revitalizing medium-sized towns.

???? For the moment, we do not see the shadow of a reform, which strengthens the status of Paris in the national landscape. There real estate pressure will therefore continue to exist for a long time. Which will keep prices up.