The worst is now behind us: What kind of recovery can we expect for the real estate market?
Lower interest rates, a slowdown in the decline of prices, political uncertainty... What factors had the greatest impact on the real estate market in 2024? Is the market beginning to rebound, or is it merely biding its time? What does 2025 have in store for us?
The teams at SeLoger and Meilleurs Agents present their analysis, based in part on tracking a new key indicator: changes in demand on SeLoger. According to this indicator, 2024 marks the end of three consecutive years of sharp declines in transaction volumes. SeLoger anticipates a lull, with a projection¹ of 771,000 annual transactions by the end of 2024 (compared to 756,000² at the end of August, the lowest point of the year). The rental market, while still tight, is showing signs of stabilization.
Signs of improvement—but to what extent?
Although interest rates remain high, their decline—combined with rising incomes and falling prices—has offset more than one-third of the loss in purchasing power recorded between January 2022 and December 2023 (-11m2).
In Paris, the decline in prices (-14.2% during the downturn) has led to an increase in real estate purchasing power, which is now higher than it was in September 2019 (when interest rates were around 1.2%) and among the highest levels recorded over the past five years.
A sharp rebound in demand was observed in the spring. This rebound marks a reversal of the trend, with demand now at a level comparable to that of last year, after having fallen sharply in the meantime.
On the supply side of the housing market, after three years of increases, the market appears to be stabilizing, which could reinforce signs of a recovery4.
Outlook: When Will the Recovery Begin?
By the end of 2024, demand is expected to decline, while supply is expected to remain stable at a high level. SeLoger anticipates a slight decline in prices that is expected to continue, resulting in a total of 771,000 transactions for the year;
The market recovery traditionally seen in the spring is expected to be stronger in 2025. This trend could be driven by potentially rising demand, supported by continued declines in interest rates between now and then and a consistently stable supply of properties for sale.
