Real estate: true price in Île-de-France, city by city.

Decrease in residential real estate transactions in the French region

According to a report by the Chamber of Notaries of Paris and the Ile-de-France region, the number of residential real estate transactions in the French region fell by 25% in the second quarter of 2023, and no city was unchanged.

Impact on the market and customer demand

"In 2022, apartments in Neyili were sold within a month on an average. But since the beginning of this year, it has taken three and a half months to sell. Buyers are haggling much more," notes Franck Silver, CEO of Paris Ouest Sotheby's International Realty.

This often results in success for buyers, who on average achieve price reductions of up to 5%. "In the beginning, only housing with defects suffered. Now almost the entire market is under pressure," marvels Alexis Michel, director of the Vaneau agency in Neuilly.

In the commune bordering the Hauts-de-Seine department, exceptional properties have resisted this erosion phenomenon. This is the case for this 186 m² garden apartment with 190 m² of outdoor space and excellent energy efficiency, located on Boulevard Maurice Barres and recently sold for 2.7 million euros. "Garden homes in Neuilly are also protected. It's a shortage market. These properties sell for between 5 and 15 million euros," notes Charles-Marie Jottras, president of Féau.

Housing prices in different neighborhoods

"In July 2023, Avenue Charles de Gaulle, as well as the other main streets of Neuilly, are still priced around €10,000 per square meter. "Demand is still very strong in the Sablon area as well as on Saint-Jame, where prices average between €12,000 and €15,000 per square meter for apartments without defects and in an ideal location. But for 'ordinary' apartments, prices no longer exceed this threshold," notes Olivia Pottier, director of the Emile Garsen agency in Neuilly-sur-Seine.

The same situation is observed in Saint-Cloud, where apartments with defects (building without elevator, apartment with northern exposure, requiring renovation...) are valued at 7,500 euros per square meter. "At the same time, properties with quality finishes, such as this duplex apartment in Montretou of 170 m² with a beautiful terrace and views of Paris, have been sold at 13,000 euros per square meter," notes Martha Perez-Embid, director of the Barnes Hauts-de-Seine Ouest agency.

In other departments, such as Boulogne-Billancourt, the decline in prices is more marked. "Even for properties without defects, buyers are offering prices below the starting price. Prices in the commune have fallen by 10% in a year, and now do not exceed 9,000 euros per square meter," reports Marie-Hélène Delorme, director of the Orpi agency in the city.

The impact of mortgage rates and buyer demand

This decrease is explained by the reduced purchasing power of buyers due to the rise in mortgage rates. Recall that they rose over the year from 1.82% on average for all terms in August 2022 to 3.80% in August 2023, according to the Crédit Logement/CSA Observatory. Brokers say the public's purchasing power in real estate declined by about 20% over the period. The monthly interest rate cap imposed by the Bank of France in February 2023 and in place until early 2024 seems to have had no effect on the market. "The only way to revitalize the market is to accept a 10-15% price reduction by sellers.

Buyer behavior in the market

First-time buyers are showing up at agencies less and less frequently. “Their numbers have fallen dramatically and the market is controlled by buyers who are increasingly paying cash for properties costing less than €250,000,” notes Rémi Levin, of Century 21 Anatole-Franceagency in Levallois-Perret. This observation is confirmed by Stéphane Le Balsch, director of agency Stéphane Plaza Immobilier in Saint-Germain-en-Laye, where more and more buyers are buying properties in cash. “We have just sold a 130m² house requiring some cosmetic work in 48 hours at a price of 1.5 million euros.” A stream of Parisians looking to move to the countryside and expats returning from London continues to flood the market.

Impact of energy efficiency and repair works

Buyers are very attentive to the energy efficiency of housing, especially if they are not investors: “It's simple: if the energy class is between F and G, buyers don't even want to hear about it,” clarifies Stéphane Le Balch.

The calendar of the Climate and Resilience Act continues to affect the market, and the situation is such that several real estate agencies are now recommending that sellers carry out works before putting up for sale properties that have class G. “The price discount for such housing can be as much as 20%,” notes Sandrine Manso, associate director of Orpi Nogent-sur-Marne Atexia agency. “We had a problem with an apartment in a 1930 G-rated building that we couldn't sell. The owner replaced the ventilation and electric convectors and it now has a class E. The renovation cost him €4,000, but the seller was able to recover his costs when he sold it,” she notes.

Situation of houses and homes in Vincennes

Even family homes located in prestigious areas of famous cities drop significantly in value when major renovation works are planned. This is the case of a large 145 m² apartment in Versailles on rue de la Paroise, which required almost 230,000 euros worth of renovations and sold for 850,000 euros, making the average cost per square meter around 5,800 euros. However, the city is less affected by the crisis than others: 'The market remains stable as the demand for outstanding properties exceeds the number of available opportunities. Prices range from 8,000 to 10,000 euros per square meter. Saint-Louis and Notre-Dame are highly sought after by families for classic apartments without works,” points out Karine Deschachy, a real estate consultant at the Emile Garsen agency in Versailles.

However, it is especially houses that are thriving in this situation. According to the Paris-Ile-de-France Chamber of Notaries, the average price of houses fell by just 1.9% over the year in the Ile-de-France region, while apartment prices fell by 3.7%. This is particularly true in Vincennes, where, although apartment prices fell by 5.3% according to notaries to €8,780 per square meter, houses remain expensive. A villa with an F class energy efficiency rating in the city center and about 200 m² on two floors with 75 m² of outdoor space is valued at around 1.9 million euros. In Fontenay-sous-Bois, houses on the border of the forest of Vincennes, near the town of the same name, regularly sell for between 8,000 and 9,000 euros per square meter. These are rare enough properties to withstand the change in the market.