This Paris Life
Expert Insight, Breaking News, and Insider Stories on Real Estate in Paris
Paris continues to be a buyer’s market.
In 2024, expect a faster drop in real estate prices across France. The average price per square meter has already fallen by 1.8% compared to the previous year. This decline is tied to several significant changes in the housing market.
The number of home sales has taken a sharp downturn, dipping below 900,000 for the first time in seven years—almost 25% fewer sales compared to 2022. The abrupt fall is attributed to a considerable drop in the purchasing power of French households. This is mainly due to stricter monetary policies by the European Central Bank, causing lending rates to soar from 2.5% to over 4% within just a year.
The restrictions on lending have also tightened considerably, resulting in around a 40% drop in home loans granted in 2023 compared to the previous year. Alongside this, there’s been a notable decline in property prices nationwide, a trend not seen since 2013. Even influential areas like Nantes, Lyon, and Paris have seen substantial drops in their real estate values.
The decline seems to be just beginning, affecting even rural areas that initially saw resilience post-health crisis. While recent signals from the European Central Bank suggest a potential easing of credit restrictions, any immediate market turnaround is uncertain. Despite a possible reduction in interest rates and improved access to credit in 2024, it’s unlikely to match previous favorable conditions for the real estate market.
As a result, property prices are expected to continue dropping by around 4% throughout the upcoming year, potentially creating a period of lower prices until the spring when effects of falling interest rates might start to show. However, these changes may not significantly alleviate the existing imbalance between property supply and demand, continuing to keep the market in flux.
Source: meilleursagents.com
Contact Paris Property Group to learn more about buying or selling property in Paris.
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