Housing prices continue to decline inexorably in the Paris region

The tremors observed in recent months by the Chamber of Notaries on the old real estate market in the Paris region remain insignificant and only bring a small glimmer of hope after seven difficult quartersaccording to Elodie Frémont, notary in Paris and president of the Real Estate Statistics commission of the Chambre des Notaires du Grand Paris. Elodie Frémont always observes a lot of forced sales, long negotiations and sometimes tense meetings in notary offices.

In fact, prices of existing housing remain under pressure from depressed transaction volumes and the fallout from the Paris Olympic Games seems insignificant. The sales volumes of old housing in Ile-de-France for the third quarter of 2024 fell by another 10% compared to the same period a year ago. More striking, compared to the excellent year 2022, the decline in activity in the third quarter of 2024 is close to 40%.

Signals of improvement still have little effect

Notaries observe that the signals of improvement for buyers, such as the fall in prices and the decline in home loan rates with easier access to credit, are only gradually reversing the negative dynamic that began in mid-year 2022, following the shock of rising rates. In this context, the annual drop in prices continues in the third quarter of 2024 even if it tends to moderate around -5%.

In Paris, the average price per square meter of apartments continues to fall: it is estimated at around €9,360 per m² according to the latest sample of sales promises from notaries, compared to €9,520 per m² for transactions recorded in the third quarter.

For all apartments in Ile-de-France, the average price is close to €6,000 per m² in sales promises after €6,150 per m² over the past quarter. For houses, which remain the most impacted by the drop in prices over the past two years, the descent also continues to return to the price levels of 2020.

Almost -15% from the highs

Over the last three years, the drop in prices in Paris can now be estimated at around -15% compared to a peak close to €11,000 per m², but with certain jolts and a downward acceleration in 2023 with the strong rise in prices. borrowing rate. Over one year, the decline now tends to be closer to -3% according to preliminary contracts and 7 districts have fallen below the €9,000 per m² mark.

The correction remains the strongest across the entire Eastern Parisian crescent with in particular the 19th arrondissement returning around €7,700 per m² and the 20th at around €8,000 per m². Faced with the resistance of the 6th district, the most expensive in the Capital at almost €14,000 per m² thanks to the presence of foreign buyers who represent almost 1 in 4 sales, the price gap between the most expensive district and the least expensive (the 19th) is the highest: around €6,000 difference and a ratio close to single to double.

Negative message

In this context where only further reductions in borrowing rates or a more pronounced correction of prices seem to be able to revitalize the market in the coming months, the notaries emphasize that the announcement of the increase in transfer duties for valuable consideration provided for in the draft finance law 2025 sends a negative message to buyers and all players in the real estate chain which goes beyond the increase in the financial burden of this measure.