The French real estate market faces a crisis as second-hand home sales fall to 750,000 in 2024, the lowest level since 2015, raising concerns.
In a rather disconcerting development, the French real estate market is currently grappling with an unprecedented downturn in the sales of second-hand homes, as evidenced by a staggering decline to a mere 750,000 transactions in 2024, according to the Notaires de France. This figure represents the lowest point since 2015, casting a pall over the sector’s prospects.
The preceding two years have witnessed a precipitous decline in market activity, culminating in a remarkable 17% reduction in transactions relative to the previous year. By the close of September, notaries had officially documented 780,000 transactions over the preceding twelve months, starkly contrasting with the 935,000 sales recorded during the same period in 2023 and the 1.13 million in 2022.
Geographically, this decline is particularly pronounced in regions such as Gironde and Pyrénées-Orientales, which have suffered a staggering 23% drop, alongside Charente-Maritime and Seine-Saint-Denis, both experiencing declines of 22%. Conversely, areas like Yonne and Oise have exhibited slightly more resilience, with declines of 11% and 8%, respectively.
This meteoric fall can be attributed to the persistent malaise afflicting the real estate market since 2022, further exacerbated by the inexorable rise in interest rates. The flicker of optimism that emerged with the loosening of monetary policy in June appears to have been eclipsed by the recent dissolution of the National Assembly, leaving many stakeholders in the industry ensnared in a web of uncertainty.
On the pricing front, the Notaires de France have observed a “stable trend” in recent months. While prices continue to decline—down 3.9% year-on-year in the third quarter—the rate of decrease seems to be stabilizing. Projections for the fourth quarter of 2024 suggest that the annual drop in prices will moderate to a modest -1.6%. Furthermore, the Notaires anticipate that by the end of January 2025, the one-year declines will continue to diminish, with expected decreases of -1.2% for metropolitan France, -0.4% for the provinces, and -2.5% for Île-de-France.
The current state of the French real estate market resembles a tumultuous rollercoaster ride—one that has taken a sharp nosedive, leaving many to ponder the pressing question: when, if ever, will it regain its equilibrium?
