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Paris Is Still A Wait-And-See Market

Volume XXII, Issue 27

View of Notre Dame in Paris from down the river Seine

The Paris Region real estate situation in April 2024, from a monthly real estate communication published June 27, 2024:

The decline in activity continues, with just 23,290 sales of existing homes in the Paris region from February to April 2024, down 23% from February-April 2023 (30,310 sales).

Sales volumes for apartments and houses in Paris from February to April 2024

Only the capital stands out, as has been the case for many months, with a slightly more moderate drop in activity (-15% in one year). Outside Paris, all markets are severely affected. In the Petite Couronne, sales volumes are down by 25% for apartments and 27% for houses, while in the Grande Couronne, sales are down by 26% for both housing types.

Even more striking, sales of existing homes from February to April 2024 were down 39% compared to the same period in 2022 for the region as a whole. Activity remains historically low in a climate where a wait-and-see attitude prevails. According to pre-contracts, the outlook remains downbeat for the coming months, although the deterioration will likely be progressively less marked.

Property prices throughout the Paris region

However, uncertainties are heightened by the dissolution of the French National Assembly, a new election period, and all the possible consequences (political, economic, fiscal, and financial) on an already bearish and fragile market.

Annual price declines are set to moderate in the coming months. The downturn in activity continues to weigh on prices. In one year, from April 2023 to April 2024, housing prices in the Paris region fell by 8.1%, with comparable declines for apartments (-8.0%) and houses (-8.4%).

Annual price declines are fairly uniform from one market to the next, ranging from 7% for apartments in the Grande Couronne to 8.6% for both apartments in the Petite Couronne and houses in the Grande Couronne. In Ile-de-France over three months, from January to April 2024, house prices fell by 2.4% (-2.2% for apartments, -2.7% for houses).

A real estate office in Paris

However, according to our leading indicators on pre-sale contracts, prices are likely to change little or increase slightly, depending on the market, between now and August. These trends, which are clearly visible on the curves for the next few months, should lead to a slowdown in the annual decline between now and August, particularly in the Greater Paris region.

In Paris, the price per m² of old apartments is unlikely to change much, rising from €9,440 in April (-7.8% in one year) to €9,450 in August (-6.8% compared to August 2023). In one year, from August 2023 to August 2024, apartment prices are expected to fall by 6.9% in the Petite Couronne and 4.7% in the Grande Couronne (+1.4% in 3 months from May to August 2024). For houses, prices are expected to fall by 6.2% in the Petite Couronne and 5.2% in the Grande Couronne (+2.2% in 3 months from May to August).

Views over Paris

Read the report in its entirety (in French) by downloading the PDF.


Property purchasing power report S1 2024 – First positive trend in almost all French cities in 4 years

Paris, June 27, 2024

While the issue of French purchasing power is on everyone’s lips, it’s time to take stock of real estate purchasing power in the first half of 2024. Between geopolitical conflicts and the global pandemic, borrowing rates have soared from 1% in 2021 to over 4% by the end of 2023. In 2024, for the first time in several years, these rates have finally begun to fall, with rates now averaging 3.70% over 20 years. This obviously has a positive impact on the borrowing capacity of the French, and thus on their purchasing power.

Meilleurtaux takes a look at the evolution over the last six months of French property purchasing power in France’s 20 largest cities, and between now and December 2021.

Chart comparing cities in France, by Meilleurtaux

Real estate purchasing power has increased in almost all French cities since December 2023

With the exception of Nîmes (which has remained stable), purchasing power has increased in every city in the ranking over the last six months. Topping the list of positive developments is Saint-Etienne, where it is now possible to acquire 123m2 (+5m2) for 169,408€ borrowed. Unsurprisingly, for the same sum in Paris, you don’t gain much space, but the evolution remains positive, with an increase from 17 to 18m2. The same applies to Nice and Toulon, where the increase is a little timid (+1m2). However, in other cities such as Strasbourg, Toulouse, Lille, Reims, Dijon and Le Havre, the purchase price has risen by 4m2 for a similar loan.

“Even if these developments are still timid, this is the first improvement in the situation since the start of the crisis in 2022! This is a very positive sign for the market, and should encourage the French to resume their real estate projects.”

Views over Paris

Maël Bernier, communications director and spokesperson for Meilleurtaux

2021 versus 2024: a very different situation

The downturn in the property market has led to a fall in prices per m2 , particularly in major cities, observes Maël Bernier, communications director and spokesperson for Meilleurtaux.

What’s more, if we compare purchasing power in December 2021 versus purchasing power in June 2024, the differences are extremely significant for some cities.

Maël Bernier explains: “In fact, despite a slight positive trend between December 2023 and today, if we compare with the end of 2021, some cities have lost up to 35m2, or the equivalent of 2 habitable rooms. Examples include Nîmes (-35m2), Toulon (-34m2) and Le Mans (-34m2). Over the same period, purchasing power also fell sharply in Saint-Etienne (-27), Grenoble (-21), Le Havre (-25), Dijon (-19) and Marseille (-19).”

Views over Paris

Things to remember…

This is the first time in four years that we’ve seen a positive trend in the purchasing power of French people, but we’re still a long way from where we’ll be in 2021. We owe this improvement to the fall in interest rates, but also to some downward adjustments in prices.

Purchasing power is at the heart of today’s concerns. The French have lost a great deal of purchasing power in recent years: “If we look at the 4-year period between 2021 and 2024, we see an average loss of 17m² in France, so it’s quite clear that the purchasing power of the French has plummeted. In the past, low interest rates compensated for sharply rising prices, then we had to deal with rising interest rates without a fall in prices, and now interest rates are falling and prices are adjusting, so the situation is more favorable,” adds Maël Bernier.

Views over Paris

The start of 2024 looks promising for the real estate market. While interest rates will not fall drastically between now and the end of the year, they will stabilize, enabling many French people to relaunch their real estate projects. It remains to be seen whether the current political climate in France will have too great an impact on these forecasts.

Read the report in its entirety (in French).

A bientôt,

Adrian Leeds with a copy of an article on her with her photoAdrian Leeds
The Adrian Leeds Group®

Patricia BrooksP.S. Yesterday Patricia Brooks, the Courage Catalyst, enlightened us with how she overcame her fears and helps others to do the same in order to get the courage to move to France. Patty Sadauskas and I joined Patricia in a discussion with a Q&A from the audience in this one-hour webinar. You can watch it now by tuning into our YouTube Channel.


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