Prix real estate : insurmountable decline in major cities
French real estate prices have long attracted attention and speculation, but 2023 has brought many surprises. Contrary to expectations, eight of the eleven largest French metropolitan areas have seen prices fall. So what factors are at play and how does this affect the real estate market? Decoded based on the Meilleurs Agents barometer.
Which cities have been hit hardest by the falling trend?
The spiral of falling real estate prices is spreading to France's major cities. Of the country's eleven largest cities, the majority - eight cities - have seen prices fall over the past year. While September seemed stable, the annual report shows a clearly falling trend.
Nantes is the most''affected city
.Nant is without doubt the city that has been hit hardest, with property prices falling 5.1% year-on-year, including a 4.4% drop in the last six months. Compared to a year ago, the market is experiencing a shortage of properties and inventory has never been so low.
Bordeaux and Lyon: historic decline
Bordeaux and Lyon were also not left behind, with respective price drops of 8.3% and 8.4%. These cities, where the price per square meter is the highest after Paris, are suffering from rising interest rates on loans. The level of real estate prices combined with these increases limits borrowers' options, ruling out many projects.
The key drivers of the fall: rising interest rates on loans -''Dependence on credit - high real estate prices.
Survivors: Lille, Nice and Marseille
In contrast to general trends, Lille, Nice and Marseille continue to resist falling real estate prices.
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Marseille and Nice: the beginning of the decline in real estate prices
Despite their stability, Marseille and Nice are beginning to show signs of weakness. In Nice, for example, rate pressure has slowed over the past six months. Progress is just 3.3%, including 0.6% in the last three months.
Real estate prices: implications for''significant changes in real estate prices in major French metropolitan areas. With rising interest rates on loans and economic uncertainty, market participants are at a crossroads.
The prospect of a rapid market recovery seems increasingly unlikely. This confirms the forecasts of analysts Meilleurs Agents, who predict a 4% decline over the next 12 months in France. In addition, transaction volume is expected to fall by 10%, following an already downward trend of 20% this year compared to 2022. In this context, only strategies adapted to the new environment will successfully deal with this uncertainty.
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