"Real estate price reduction: How much is your property worth now?"?"

After a period of activity in the real estate market, there has been a turning point. Accelerated decrease in property prices is expected in the coming days. Here is the forecast of adjusted housing costs in various regions of France that will be affected by this decreasing trend.

The decrease in real estate prices is particularly noticeable in some departments. This is happening especially due to the economic crisis affecting France, and aggravated by the war in Ukraine. In resisting the inflation that has been in effect since last year, French banks had no choice but to raise interest rates.

In fact, according to data provided by the Bank of France, the average interest rate on mortgage loans rose from 2% in the last quarter of 2022 to 4.05% in September 2023. This significant increase has led to a decrease in demand for mortgage loans, which are now considerably more expensive. Due to the fear of falling into a debt spiral, many French people have been forced to abandon their plans to purchase property.

As a result, housing sales have significantly decreased. According to the National Federation of Real Estate (FNAIM), "from March 2022 to March 2023, there were only 1,069,000 transactions." This is a 9% decline over the year.

The crisis in the real estate market may continue. According to the FNAIM barometer published on June 1, 2023, the decline in property prices affects all regions of France. Overall, the valuation of residential real estate, whether houses or apartments, has decreased by an average of 1% from March to May 2023. However, it is important to note that this price drop has a stronger impact in certain departments.

We see that property prices in major cities like Paris and Lyon have decreased by 3.2% over the year. According to forecasts shared by FNAIM, this downward trend may continue, especially considering that real estate transactions are expected to keep declining. Indeed, by the end of this year, a decrease in housing sales volume to 950,000 is anticipated. Therefore, the decline in property prices may remain relevant in 2024 as well.