What Are the Key Takeaways from the Real Estate Market in 2023?

The Notaries of France have released their annual real estate report and the initial trends for early 2024.

“The year 2023 was marked by a confluence of several factors that weighed on the market, as the euphoria and the abnormal period came to an end. Given the inflationary environment, which has automatically eroded the purchasing power of the French public, and the rise in interest rates affecting the real estate market, we are seeing a rapid decline in the volume of transactions in the existing-home market, which is expected to range between 850,000 and 890,000 by year-end. “This level is close to that of 2016, whereas we were still at more than 1.1 million sales of existing homes at the end of last year,” explains Maître Edouard Grimond, spokesperson for the Office of the High Council of Notaries, in charge of real estate and housing, stating:

Housing prices, meanwhile, began to decline across the country in the third quarter of 2023 compared with the same period a year earlier, though the trends differed between the Île-de-France region and the rest of the country. Prices for existing apartments remained relatively stable year-over-year in the rest of the country, rising by 0.5%, while they fell by 5.3% year-over-year in the Île-de-France region. Trends for January 2024 show the beginning of a 1.1% decline in prices in the provinces and a continuing decline in Île-de-France, down 6.8% year-over-year. For older homes, price trends are negative in both the provinces and the Île-de-France region, though to varying degrees: -1% in the provinces and -5.4% in the Île-de-France region. Year-over-year declines are expected to deepen by the end of January 2024: -3.3% in the provinces and -7.3% in Île-de-France.

Amid this period of significant turbulence across the entire real estate market—and despite the challenges of securing financing, which tenants in particular find difficult—the French continue to show a very strong desire to own their own homes. They want their homes to be more sustainable, as evidenced by the high priority given to energy efficiency improvements in home-buying plans, as well as the fact that 40 percent of homeowners report they are already undertaking such renovations, as revealed by our survey.” 

Key Takeaways for 2023

With transaction volume down sharply—928,000 transactions completed in France over the past 12 months as of the end of September (compared to 1.13 million during the same period in 2022)—we can expect to end the year with between 850,000 and 890,000 transactions.

Prices, which had not declined since 2015, are beginning to fall across France, and more sharply in the Île-de-France region:

-2%: The year-over-year decline in the price index for existing apartments in metropolitan France (-5.3% in Île-de-France)

-1.6%: The year-over-year decline in the price index for existing homes in metropolitan France (-5.4% in Île-de-France)

36 m²: Eligible loan amount for an older apartment in metropolitan France (monthly payment of €800 per month for 20 years with no down payment), down 4 m² over the course of a year.

97 m²: Financing-eligible square footage for an older home anywhere in France (monthly payment of €1,300 for 20 years with no down payment), -14 m² over one year