The rebound in real estate prices is still modest, but it is gaining momentum

The latest data from SeLoger/MeilleursAgents for *Les Echos*, as of August 1, show a nationwide trend of price increases of 0.3% over the past month and 0.8% since the beginning of the year.
 

The nationwide price correction was short-lived. All it took was a slight drop in mortgage rates—which fell to an average of 3.8% over 20 years, down from 4.2% in January—for real estate prices to start rising again. On a rolling 12-month basis, prices per square meter in France’s 50 largest cities have increased by 1.9%.
 

Rural areas, which benefit from prices that are still relatively affordable compared to the rest of the market, are getting off lightly, with prices up 3.1% since the beginning of the year. 

Other cities that have historically been relatively affordable and benefit from a unique regional dynamic have seen their prices rise significantly, such as Rouen, with a 7.3% increase per square meter since the beginning of the year, and Reims, with a 7.7% increase. Both of these cities, which are accessible from Paris by train in 1 hour and 30 minutes and 45 minutes, respectively, are benefiting from a trend of people moving out of the capital, which remains too expensive relative to wages.
 

Similarly, “some cities in the ‘Greater Paris’ area will benefit from the lasting impact of the infrastructure and transportation systems left behind by the Olympic Games,” says Thomas Lefebvre, scientific director of SeLoger/MeilleursAgents. Seine-Saint-Denis as a whole has seen a slight increase of 0.5% over the past two months.
 

In contrast, the Paris market within the city limits has seen prices fall by 1.4% since January 1, bringing the rolling one-year decline to 5.7%. The correction has been even more pronounced for larger units in the capital, with a 6.6% decline over the past twelve months. Only studio apartments and small units have seen a 0.3% increase since the start of the year, though they are still down 5.1% on a rolling 12-month basis.
 

These factors explain the ranking of cities with the sharpest year-over-year declines. Nantes has experienced the steepest drop, with a 9% decline. Le Mans ranks second among the cities with the sharpest declines, at -8.8%. Next are Nîmes and Pau, both down 7.5%. Mérignac has seen its prices drop by 6.6%, while Bordeaux has fallen by the same percentage as Paris, at 5.7%. 

It should be noted that these cities have seen a significant rise in prices over the past five years. In Mérignac, for example, a square meter now costs 28% more than it did in 2019. The same is true for Bordeaux, where prices have risen by nearly 40% following the introduction of a high-speed train (TGV) that connects the city to Paris in less than two hours.
 

Proportionally speaking, the decline recorded in 2023 in response to rising mortgage rates is not enough to make up for the square meters of purchasing power lost. This factor continues to weigh on transaction volume. The notaries’ forecasts, as cited by Thomas Lefebvre, speak for themselves: 
 

The few buyers who tried to take advantage of the opportunity presented by falling interest rates quickly found themselves facing an economic environment that was too unstable to carry out their plans. With demand on the decline, sellers seem more open to offers and negotiations. Only 30% of Parisian apartments are currently selling at asking price.
 

This two-speed market—with real estate prices either rising or falling—is tipping the scales toward a nationwide 1% increase over three months. Should we expect this overall upturn to continue in the coming weeks?