France’s second hand property market is seeing a notable shift: the pace of second-hand home sales has slowed in half the country’s regions, yet property prices are reaching new all-time highs, according to the latest LPI-iad Barometer data analyzed by Michel Mouillart.
Sales Sluggish in Key Regions Amid Uncertainty
Since this past summer, the momentum in France’s second-hand property market has decelerated significantly. Over the last three months, transaction volume has stagnated or declined in half the country’s regions. Sales dropped sharply—by 10%—in areas like Alsace, Midi-Pyrénées, and Rhône-Alpes. Activity also dwindled slightly in Pays de la Loire and Nord-Pas de Calais, and has essentially flatlined in Auvergne, Centre, and Upper Normandy. In contrast, regions with a shortage of new housing—like Aquitaine, Champagne-Ardenne, and Franche-Comté—have seen sales jump by up to 25%.
Home Prices Continue to Climb
Despite the weaker activity, property values continue to rise. Nationwide, second-hand home prices were up 1.9% year-on-year as of October. Price proposals for both houses and apartments have never been higher, with signed compromise prices increasing 0.8% in just three months—a period that traditionally sees a seasonal dip in values.
Sellers, faced with a chronic shortage of available properties and persistent demand, are holding firm or even raising their prices. This is especially evident in both popular urban locations and smaller rural markets.
New Homes: Houses in Demand, Apartments Lagging
On the new-build market, single-family homes remain in high demand, especially in regions historically overlooked by developers and policymakers. In these areas, new home sales are growing at a brisk pace, supported by proactive banks and builder strategies. The result? Prices for new homes have risen 2.2% annually.
New apartments, however, are struggling to attract buyers. High prices and less attractive locations are keeping first-time buyers at bay, while private investors have become scarce amid economic uncertainty. As a result, new apartment prices have remained almost flat—up just 0.1% year-on-year.
Long-Term Price Trends: Not Always Exceeding Inflation
Over the last 15 years, price growth for older apartments has varied widely between large cities. In half of the cities with more than 100,000 residents—including Grenoble, Perpignan, and Saint-Etienne—apartment prices have barely kept up with inflation. In others, like Bordeaux, Lille, Lyon, and Paris, prices have grown on par with household incomes. Only a few cities, such as Angers, Annecy, Rennes, and Strasbourg, have enjoyed growth that outpaces wages.
A Shift to the Suburbs and Metropolitan Peripheries
A striking trend is the rising preference for properties outside city centers. Price growth in peripheral towns now outpaces many city cores, reducing the price gap between urban centers and their surrounding commuter belts. This “flight to the suburbs” is reflected in rapid m² price increases in metropolises like Grenoble, Montpellier, Nice, Rouen, Toulouse, and even Paris. Conversely, cities like Lille, Nantes, Rennes, and Strasbourg have seen apartment prices decline or remain stagnant.
In the housing market, price increases are more frequent—seen in 60% of metropolises, and rising by at least 3% in Brest, Grenoble, Nancy, and Rennes.
Regional Price Margins and the Credit Crunch
Negotiation margins between buyers and sellers vary greatly by region. Lower-priced regions (such as Burgundy, Limousin, and Picardy) see higher margins and frequent price revision requirements, as buyers struggle to put together adequate down payments amid stricter lending rules. High-priced areas like Paris and the Côte d’Azur see the opposite: tight margins, low supply, and rising credit constraints that push out younger and lower-income buyers.
Why the Slowdown?
The housing market is contending with rising mortgage rates and stricter credit conditions imposed by the Banque de France, making it increasingly difficult for many French households to finance their purchase. After a surge in spring 2024—sales rose an astonishing 31% in July—momentum faded fast. By October, sales had increased only 8.7% over three months, confirming a significant slowdown.
The Bottom Line for Buyers and Sellers
France’s second-hand property market is in the midst of a complex transition: buyer hesitancy and credit restrictions are cooling sales volumes, but a tight supply has driven prices to their highest levels on record. The market outlook hinges on how quickly financing conditions ease—and whether price growth can be sustained as more buyers are priced out.
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