Good news for buyers, less so for sellers. THE housing prices continue to fall in almost all major cities, according to the 2024 report drawn up by the Notaries of France published this Monday. A sign that the market is still struggling, the number of real estate sales is in free fall.
The number of real estate transactions in 2023 amounted to 780,000, i.e. a drop of 17% over one year, with cascading consequences on the saturated rental market. For comparison, during a “Have a good year”as in 2019, the number of transactions reached more than a million, according to Me Frédéric Violeau, notary in Caen, guest on franceinfo. The drop reached 23% in Gironde and the Pyrénées-Orientales, or even 22% in Charente-Maritime and Seine-Saint-Denis.
The number of building plots purchased by individuals has fallen drastically, by 37% over one year, hampered by borrowing rates, construction costs and by political measures limiting land artificialization.
Prices are falling almost everywhere
Real estate prices are falling sharply in almost all major cities. The biggest declines in prices were recorded in Nantes and Lyon, with drops approaching or even exceeding 9%. Among the big cities, only Nice, the second most expensive city in France behind Paris, sees the price of its square meter increase slightly this year (+0.1%).
Note the case of Rennes which, despite a drop in prices of 5.2% over 2024, has been rising in the ranking of the most expensive cities in France for ten years, going from 10th place in 2014 to 6th place. From now on. Grenoble, conversely, fell from 12th to 16th place among the most expensive cities, with a 4.3% drop in prices this year.
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The evolution of real estate purchasing power
A monthly payment of 800 euros over 20 years now allows you to buy an apartment of 111 m² in Saint-Étienne, i.e. 2 m² more than last year (but 15 m² compared to 2021). The evolution over one year is also favorable to buyers in Grenoble, Montpellier, Rennes or Nantes.
This same loan will only allow you to buy 12 m² in Paris, 29 m² in Lyon, 41 m² in Marseille and Toulouse, or even 38 m² in Rennes, 60 m² in Le Havre and 27 m² in Nice.
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And in 2025?
“We are rather more optimistic for 2025 than we were in 2023”indicates Me Frédéric Violeau. In the absence of a rebound in real estate transactions in 2025, “we hope in any case for stability and a little visibility, because real estate commitments are long-term commitments. That the French can move towards real estate acquisition.”
On the borrowing side, if disinflation is confirmed, the European Central Bank will lower its interest rates againits president Christine Lagarde declared this Monday. The reference rate is currently 3%, after reaching its historic high of 4% in 2023. However, the ECB's key rates directly impact the borrowing rates applied by banks. By lowering them gradually, the monetary institute seeks to stimulate growth while monitoring that this does not revive inflation.
The markets estimate that the ECB will make several further rate cuts in 2025, to bring the reference rate to around 2%, i.e. a so-called neutral level, which neither penalizes nor supports the economy.
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