Why the Real Estate Market Is Stalled
The real estate market in France is experiencing another drop in prices, with a notable decline in Paris (-0.6%) and in the ten largest metropolitan areas (-0.3%) during the month of November. Negotiations are becoming more frequent, and the inventory of properties is increasing.
This downward trend is accelerating in certain segments, with Paris recording its third-largest decline of the year, totaling -0.6% in one month. Over a one-year period, the Top 10 cities posted an average decline of -2.4%, a situation not seen since 2009, in contrast to the +3.8% increase observed between December 2021 and December 2022.
The rural sector appears to be the only one experiencing a slight rebound this month. However, this recovery is modest, as the increase recorded between September and December is lower than in previous years. Six of the ten major cities outside Paris saw their prices fall, with Lyon posting the sharpest decline (-1.1%). Even Nice, which had been buoyed by a strong base of second-time homebuyers until now, is beginning to catch up with the downward trend, recording a 1.6% drop over three months.
Against this backdrop of rising supply and declining purchasing power in the housing market, negotiations are becoming increasingly common, now accounting for 70% of sales in major cities. Higher interest rates have given buyers some bargaining power, with price reductions becoming necessary to close deals. The time it takes to sell a home is lengthening considerably, reaching an average of 72 days in the eleven largest French cities—an increase of 6 days over three months and 8 days over one year.
As a result of this difficulty in selling, the volume of properties available on the market has increased significantly. Between January 2022 and November 2023, the number of apartments for sale rose by 50%, and the number of houses by 73%. The Top 10 cities have not been spared by this trend, with significant increases in inventory in Strasbourg (+107%), Nantes (+82%), Bordeaux (+68%), Lyon (+75%), and Rennes (+55%). Paris, although less affected in percentage terms, has also seen a 34% increase in the number of properties available on the market, adding to a 123% rise since the health crisis in 2020.
(source: MeilleursAgents)
