French Housing Market Q1/23
7th July 2023
Several major estate agents in France have published their latest perspective on the housing market.
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Housing Market Q1/23
7th July 2023
Several major estate agents in France have published their latest perspective on the housing market.
The reviews come from four estate agent chains – Century 21, Laforet, Guy Huquet and Orpi, as well as the national association of estate agents, FNAIM.
After 2 years of unprecedented growth, the agents all report that the market is slowing down, with sales falling, and prices starting to stabilise or fall. The consensus seems to be that it is a return to normal.
There is also general agreement that the downturn is sharper in Paris than in other parts of the country, and that the picture in the regions is mixed.
Century 21, the largest of the networks, reports that sales are down -14% in Q1 over Q1 2022, which they attribute to the sharp rise in interest rates.
Prices in Paris have fallen by around -6% in a year, whilst in the Ile-de-France they are down by -3.9%. In the regions, prices have also fallen marginally in Auvergne-Rhône-Alpes, Bourgogne-Franche-Comté, and Centre-Val de Loire, but in Brittany and Provence Alpes Côte d’Azur prices are still heading north. In Nouvelle-Aquitaine and Occitanie house prices are also up by around +2% over a year.
Laforet Immobilier report that: "The current trend is marked by a rebalancing between supply and demand, which translates into a volume of transactions comparable to that of 2018, after the euphoria of recent years."
Despite a fall of around -15% in sales across all regions compared to the same period in 2022, the market remains resilient.
Over the past 6 months prices have fallen slightly, by around -1%. The agents state that: "Owners, if they are not forced to sell, prefer to wait for a more favourable moment to sell their property, which contributes to this evolution."
In some regions prices have continued to rise, notably along the Atlantic coast.
In contrast prices in the cities have fallen more noticeably – Lyon down -4.8%, Bordeaux -3.9% and Lille -2.1%. In Paris prices have fallen by -4.3%, pushing the average price under the €10,000m2 threshold.
Orpi report a more significant fall in sales of 21%, but with prices holding steady, with a fall of just -2%.
Like other agents they state that in Paris and other major cities the slowdown is more pronounced, with prices falling on average by an average of -6%. Conversely, in Marseilles, Strasbourg, and Lille prices rose by around +6%.
Orpi comment that: The fall in real estate prices is a crucial step for the sector because it will restore a balance between supply and demand. This development is eagerly awaited in order to revive activity in the sector."
Against the general tide of opinion, Guy Huquet agents state that since the beginning of the year prices have increased by +2.1% over Q4 2022. However, their own barometer is based on an aggregation of advertised prices not sale prices, which probably explains the difference.
Nevertheless, they echo the resistance amongst owners noted by other agents, stating: "Contrary to recent announcements, prices have not yet begun to decline. An observation consistent with the reality on the ground: we feel an inertia on the part of sellers. Not all of them are yet ready to accept that the economic situation and the decline in purchasing power or borrowing power of buyers requires a questioning of the displayed value of their property."
Finally, the national association of estate agents FNAIM report a drop in sales of 15%, equivalent to around 150,000 transactions.
They state that: "After being driven by attractive interest rates allowing it to remain dynamic until 2022, the real estate market is experiencing a real turnaround. At the end of 2022, we noted a deceleration which is unfortunately confirmed in 2023. The effect of inflation in recent months and the growing difficulties in accessing mortgages are clearly being felt in the number of transactions, which are falling drastically."
On prices, they state that at a national level they have fallen by around 1% in Q1, but that the fall has been greater for houses (-1.7%), with apartments remaining relatively stable. The graphic at the top of the page provided by FNAIM shows the average national movement in prices for apartments and houses since June 2022.
They conclude by stating: "If this drop in prices is general to the whole of France, certain areas, like Paris, are suffering a greater drop. We expect this deterioration to continue in the weeks and months to come. Over the whole of 2023, prices should drop by around 5%... which would represent a real drop of almost 10% combined with inflation."