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Paris Prices Continue to Fall

Volume XXI, Issue 27

A Vendre, for sale, sign on a balcony railing on an apartment in Paris

Sales volumes continue to fall in the Capital. Between February and April 2023, 33,570 existing homes were sold in the Paris region. The slowdown continues, with a 24% drop in activity compared to the same period last year, and 10,870 fewer sales in 3 months.

Market fundamentals have not changed. Borrowers continue to be penalized by rising mortgage rates, which increase their monthly payments and reduce their solvency. In addition, access to financing remains highly restricted.

It is true that the comparison with the excellent start to 2022 accentuates the decline, but activity is down 7% compared with the average of the last 10 years (-4% for apartments and especially -14% for houses after the post-covid expansion phase).

All markets were affected by the slowdown in activity, in roughly comparable proportions. Apartment sales volumes are down by 21% in Paris, which is no longer an exception to the rule, by 25% in the Petite Couronne and by 23% in the Grande Couronne.

The housing market is a little harder hit, with sales volumes falling by 28% in Ile-de-France when comparing February-March-April 2023 with the same period in 2022 (-30% in Petite Couronne and -27% in Grande Couronne).

Initial indicators, both in terms of sales volumes and pre-contracts, suggest that these trends will continue over the coming months, with no prospect of improvement.

In one year, from April 2022 to April 2023, house prices in Ile-de-France fell by 1.3%, with a 1.9% drop for apartments and stable house prices over the year.

Over a shorter period, however, price declines are in evidence across all market segments. Paris region house prices fell by 1.5% from January to April 2023. Prices for apartments fell by 1.4%, with a more marked erosion in the Petite Couronne than in the Grande Couronne. In 3 months, they also fell by 1.7% for houses. In Paris, the price per square meter of old apartments was €10,240 in April 2023, an annual fall of 2.6%.

We will then be entering the period of the year when demand pressure usually leads to price rises (purchases are made in order to be able to move before the start of the school year). But given the deteriorated market situation, and according to our leading indicators on pre-contracts, prices are expected to stabilize (-0.3%) from May to August 2023, with a very slight rebound in house prices (+0.8%), visible graphically on the curves. This will not change the annual trend, which is now downward in all markets.

In Paris, the price per square meter is expected to reach €10,080 in August 2023, still nearing the symbolic €10,000 mark. Annual price declines could reach 5%. The annual fall in prices would also be more pronounced for apartments in the Petite Couronne (-6.3%), with a decline of 6.9% in the Hauts-de-Seine, and 3.7% in the Grande Couronne.

Finally, for houses, from August 2022 to August 2023, prices should fall by 4.3% (-3.5% in Petite Couronne, -4.7% in Grande Couronne).

Read the full report (in French) in PDF form.

A bientôt,

Adrian LeedsAdrian Leeds
The Adrian Leeds Group®

P.S. Considering a property purchase in France? Don’t do it lightly. Let us help you make the smartest decisions to ensure you make the best investment you can. We can also expertly advise you how best to create a profitable rental. Contact us to learn more.


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