'real estateReal estate market: reduced volumes have affected prices - Real Estate Journal - Real estate market: reduced volumes have affected prices'

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T This is what everyone in real estate has been looking forward to: real estate prices have finally declined more noticeably. The modest price decline that began in the first half of the year is giving way to a more pronounced downward trend in the third quarter of 2023, with apartment prices down 4.1% and house prices down 2%. And it's not surprising, with the number of transactions falling''by 27% for apartments and 22.7% for houses in the same period.

It should be noted that the decline in prices is still not enough to compensate for the increase in interest rates, which have risen from 1.7% to 4.5% in a few months, on average, for a term of 20 years. Sales times have also increased significantly, by 8 days for apartments and 11 days for houses. They average 93 days and 94 days, respectively, and are approaching the highest levels ever recorded.

It should be noted that the properties most affected by the slowdown in activity today are those for rental investment. They account for 26.5% of all transactions in the third quarter of 2023, up from 30.6% in 2022.

Price reductions: regional differences

In Paris, the average''price per square meter has officially fallen below the €10,000 threshold to around €9,679 per square meter in the third quarter of 2023. However, this decrease is still not enough, as buyers have significantly reduced the size of the properties they purchase. The average size is now 45.5 square meters compared to 53.1 square meters in 2020.

Ile-de-France is also seeing a significant drop in real estate prices. Down 8.9% for apartments and 10.5% for houses, average prices now stand at €4,322 and €3,503 per square meter respectively. However, this price reduction is not enough to revitalize the market, as the number of transactions fell by 25.4% for''houses and by 31.9% for apartments. As for the terms of sale, they reached record highs: 96 days for houses and 95 days for apartments.

With regard to large cities, the situation on the markets is different. Thus, despite a significant drop in prices by 13.1%, sales volumes in Bordeaux fell by 19.4%, while in Nice prices rose by 9.2% and transaction volumes fell by 19.8%. The same can be said for Marseille, Strasbourg and Rennes, where prices are also up and activity is strongly down. It should be noted that only Lyon is an exception, with activity up 3.4% and prices down 4.9%.

The article also notes that old housing prices are falling in major metropolitan areas and rising rapidly in other regions.