Real estate prices: a significant decline is expected.

27 June 2023 According to leading real estate agencies, the decline in property prices in France ranges between 1% and 2% from the first half of 2022 to 2023. However, this decline, which is considered insufficient to offset rising interest rates on loans, has led to a drop in sales in the first half of 2023.

The need to adjust real estate prices

The French real estate market is currently experiencing a significant correction. According to real estate experts, real estate prices need to fall by at least 10%, perhaps even 25%, for the market to return to a healthy rhythm. This decline could mean a drop in value by a few tens of thousands of euros on sale. However, as''notes one real estate agent, "Sellers, especially if they are selling to buy a home, need to realize that they will probably lose on a sale but gain on a purchase."' Lower real estate prices are considered necessary to restore good market dynamism. "Real estate is experiencing a structural crisis, not an opportunistic one. In addition to the shortage of housing, prices must fall in order for supply and demand to meet again," states Guillaume Martineau, president of Orpi, in an interview with Le Figaro.

The impact of rising interest rates on sales

The rise in interest rates on loans, combined with rising real estate prices, led to a significant drop in sales in the first half of the year.