The Real Estate Market in Île-de-France: A Fragile Stabilization and Uncertain Outlook.

The existing-home market in Île-de-France is undergoing a transition. While sales volumes remain low, price declines appear to be slowing, suggesting a possible stabilization in 2025. A press release from the Notaires du Grand Paris highlights these trends and their implications for market participants.

Sales Volumes: A Slowing Decline
Between August and October 2024, 26,510 existing homes were sold in the Île-de-France region, a 5% decline compared to the same period in 2023. This decline, while significant, marks a slowdown compared to the 34% drop recorded between 2022 and 2024. This contrast reflects varying market dynamics across different property types:
• Existing apartments: a 7% decline in sales.
• Existing houses: a slight increase of 1%, confirming the appeal of these properties in a post-pandemic context.
Sales in the Greater Paris Periphery (-3%) are holding up better than in Paris (-8%) or the Inner Paris Periphery (-6%), reflecting stronger demand for suburban areas.

Prices: Moderate but Persistent Declines
Prices for existing homes continue to decline in the Île-de-France region, with an average annual decrease of 4.6%:
• Apartments: €6,140/m² on average (-4.2% year-over-year).
• Houses: €330,700 on average (-5.2% year-over-year).
In Paris, the average price stands at €9,480/m², down 4.6% year-over-year. A projection for February 2025 anticipates a slight decline to €9,420/m², limiting the annual drop to 1.4%. These trends reflect a lull following the more pronounced declines observed between 2020 and 2023.

Short- and Long-Term Outlook
Projections for early 2025 show a trend toward stabilization, particularly in the Outer Paris Region, where home prices are expected to remain virtually stable (an expected -0.6% year-over-year). In Paris and the Inner Paris Region, declines are expected to moderate to around -1.4% for apartments.
Despite these signs of stabilization, uncertainties remain. The interest rate shock, which has sharply reduced households’ purchasing power, continues to weigh on the market. Furthermore, homeowners forced to sell quickly often incur significant losses, particularly in Paris (an average loss of €31,350 when reselling within five years).

A Market in Search of Balance
The real estate market in the Île-de-France region is moving toward gradual stabilization, but trends vary significantly by area and property type. While the decline in prices is slowing, the uncertain economic climate could keep buyers cautious and prolong a wait-and-see attitude.
For investors, these trends underscore the importance of prioritizing long-term investment horizons, particularly for properties located in less competitive areas such as the Greater Paris Periphery.
 

(Source: Press release from the Notaries of Greater Paris, December 2024)