Real estate: falling prices and decreasing transactions

Real estate prices are falling in major cities, with the exception of the Mediterranean region, but this does not compensate for the loss of purchasing power associated with high interest rates.

Notaries have just published their annual statistics on real estate prices for 2023.

These figures were particularly expected during this period when the real estate market has ground to a halt in many cities.

The first lesson from the survey is that the number of transactions has, indeed, fallen dramatically.

By the end of September 2023, deals completed in the last twelve months are estimated at 928,000, a year-over-year decline of 18%. Transaction volume returned to levels seen six years ago in 2017.

This reduction in sales volume has been accompanied by a decline in prices, but it remains moderate, with the price of older apartments down 2% over the year. However, the situation is highly variable depending on the location of the facility. In the regions, prices remained stable over the year and even increased slightly (+0.5%), while in the Ile-de-France region prices fell by 5.3%.

The price of older homes, in turn, fell by 1.6% over the year, a sharp contrast to the increases recorded in the last two years: +8.1% in 2022 and +9.1% in 2021.

"The interest in homes associated with the Covid-19 period seems to be fading, although the desire to have one's own outdoor space, such as a garden, balcony or terrace, is still in demand," says Sophie Sabo-Barce, president of the Notary Advisory Council.

The decline in real estate prices does not affect all cities: the upward trend in prices remains in Orleans (+5.1%), Marseille (+5.6%), Toulon (+7.2%) and Nice (+7.3%). As in previous months, cities in the Mediterranean region seem resilient to the overall trend.

In contrast, for the most expensive cities such as Paris, Lyon, Bordeaux, Nantes and Rennes, there is a decline ranging from -0.2% to -3.9%. Median prices now range from €1,210 per square meter in Saint-Etienne to €10,180 per square meter in Paris.

In Orleans, Grenoble, Reims, Dijon and Toulon, the median price is around €2,600 per square meter. And in four cities prices exceed 4,500 euros per square meter, namely in Paris, Bordeaux, Nice and Lyon. When it comes to older homes, Strasbourg saw the strongest decline: -4.4% year-over-year. The declines in Lyon and Rennes are -3.1% and -2.4%, respectively.