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2022 ended with a less fluid French real estate market and more selective buyers
In the 3rd quarter of 2022, sales volumes of existing homes fell by 10% compared to last year, which was the highest level ever reached for a 3rd quarter.
Despite this slowdown, activity remained at a historically high level. With the exception of Paris, this decline occurred in all departments of Ile-de-France. The notaries of Greater Paris observe that the market is less fluid with more selective buyers, less in a hurry to finalize their project, and coming up against difficult bank requirements and refusals to finance their project.
An 8% decline for apartments and a 15% decline for houses, when comparing the 3rd quarters of 2021 and 2022. The attractiveness of this market, reinforced by the crisis of COVID, now seems behind us. Moreover, the notaries indicate that the energy crisis and the financing difficulties affect more severely home buyers and first-time buyers.
Paris, however, still has a high volume of sales, thanks to the slightly downward trend in prices which opens up possibilities for buyers. Paris is the only geographical sector to record a new surge in sales (+2%) from the 3rd quarter of 2021 to the 3rd quarter of 2022. Year-on-year, nearly 41,000 apartments were sold in the capital, a level well above (+23%) the 33,200 homes sold on average over the past 10 years.
In this less dynamic context, where tensions are gradually easing, apartment prices in Ile-de-France have hardly changed in one year (+0.2%) from the 3rd quarter of 2021 to the 3rd quarter of 2022.
For houses, however, and despite the downturn in activity, price increases remain the strongest on the market. Over the last twelve months, from October 2021 to September 2022, 188,500 old homes have been sold, barely 3% less than a year earlier and a level still close to historic records. However, signs of a gradual market slowdown have multiplied since the start of the school year, in a context that makes it harder than before to carry out projects.
This new deal opens up more uncertain prospects, even if real estate retains its role as a safe haven and asset security in an inflationary context, even though the needs related to demographics and societal changes are still there.
Original source: Paris.Notaries.fr
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