Real Estate Prices in France: Stabilising Trends Ahead

Leading estate agents report stabilising real estate prices in France, with potential rises expected by next year after recent slow sales.

As the France real estate market navigates through a challenging period, recent analyses from leading estate agents suggest that 2024 may mark a turning point. After three consecutive years of declining transaction volumes and fluctuating property prices, the outlook is becoming increasingly optimistic. The latest report, presented to the press on September 3, 2023, is aptly titled “The Worst is Behind Us,” indicating a potential recovery on the horizon.

Current Market Overview

The report highlights that property prices in France have experienced a slight decline of 1.3% as of September 1, 2023, compared to the previous year. This follows a more pronounced drop of 3% observed in April. However, the landscape is changing, particularly in rural areas where prices have begun to stabilize and even rise. Since January 2024, there has been an overall increase of approximately 0.5% nationally, suggesting that the market is starting to regain its footing.

Despite these positive signs, urban areas continue to face challenges. The report indicates that real estate prices in France's ten largest cities have decreased by 1.9% over the past year, with the 50 most populous municipalities experiencing a 3% decline. The capital city, Paris, has been particularly hard hit, with prices falling by 4.8% year-on-year. This marks the most significant price reduction in Paris since 2000, with an overall drop of 14.2% since July 2020. Currently, the average price per square meter in Paris stands at €9,293.

Regional Disparities in Price Trends

The contrasting trends between urban and rural areas underscore the complexities of the France real estate market. While urban centers grapple with declining prices, rural regions are witnessing a different narrative. The report notes that prices in rural areas have increased by 1.2% year-on-year, reflecting a growing demand for properties outside major cities. This shift may be attributed to changing lifestyle preferences, with more buyers seeking space and tranquility away from urban congestion.

Future Projections for the Market

Looking ahead, estate agents are cautiously optimistic about the trajectory of property prices. While they anticipate that prices may continue to experience slight declines through the end of 2024, a complete stabilization is expected by year’s end. The report forecasts an upward cycle beginning in 2025, with a projected price increase of at least 2%. Additionally, the number of property transactions is expected to rise significantly, with estimates suggesting 900,000 transactions in 2025, up from 771,000 in 2024.

This anticipated recovery is particularly promising for the rural property market, which has already begun to show signs of growth. The increasing interest in rural properties may be driven by a combination of factors, including remote work opportunities and a desire for a more balanced lifestyle.

The France real estate market is poised for a potential turnaround as it emerges from a prolonged period of decline. While urban areas continue to face challenges, the stabilization of prices and the upward trend in rural regions signal a shift in buyer preferences and market dynamics. As we move into 2024, stakeholders in the real estate sector will be closely monitoring these developments, with hopes that the worst is indeed behind us. The outlook for 2025 appears promising, with expectations of rising prices and increased transaction volumes, suggesting a renewed confidence in the France real estate market.