Property slump eases in France but sellers still need to be patient
The drop in prices is steadying but the situation is not the same across the country
Industry professionals believe that the housing market is set to rise following two years of decreasing prices
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After two years of falling demand for property in France and sellers forced to lower prices, industry professionals believe the market is hitting the bottom of the dip and will soon start to rise.
Price drops for non new-build properties are predicted by notaires to be reduced to -2.6% year on year on average by late November (2.2% for flats and -2.9% for houses).
This is the smallest dip since prices started dropping in 2023 and compares with -5% in this year's second quarter.
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Regional differences
These estimates, however, hide differences between the Ile-de-France/Paris region and the rest of France.
Year-on-year price drops for flats in Ile-de-France are estimated at -3.9% but in the rest of France they are only -1% for flats and -2% for houses.
Notaires say in their latest market report that “this stabilisation of price drops, after very strong market re-adjustments, especially in large cities, linked to the lowering of mortgage rates [now around 3.6% over 25 years] means this is a good time to buy if you find the right property – and sellers too should seize this less pressurised moment that is settling in, while remaining open to the possibility that price adjustments might sometimes be necessary.”
From the second quarter of 2023 to second quarter of 2024, steep drops in cities included, for non new-build flats, -9.5% in Bordeaux (to €4,160/m2), -11.1% in Nantes (€3,360), and -10.1% in Nîmes (€1,980). For houses, -6.6% in Brest, -7.6% in Bordeaux and -9.8% in Limoges.
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Areas that bucked that trend between the second quarters included, for apartments, Bayonne (+8.8%), Amiens (+8.8%) and Corse-du-Sud (+3%), while prices in Nice fell only slightly, by – 0.7%.
House prices rose in areas such as Le Havre (+6%), Amiens (+3.3%) and Nîmes (+5.7%).
The latest price ‘barometer’ on the property website seloger.com indicates a market that is coming out of a two-year slump, with prices in Nice rising 0.5% from October to November, 0.4% in Bordeaux, 0.3% in Nantes and 0.6% in Lille.
Price drops
However, they continued to fall in a few areas, such as Rennes (-0.8%), Lyon (-0.2%) and Montpellier (-0.3%).
The trend is likely to continue into 2025, says SeLoger, amid hopes of a further interest rate drop, following cuts by the European Central Bank.
In Paris, prices of small flats have started to rise but larger two-bedroom or more flats have continued to drop, although less steeply than before.
Overall, Paris saw prices drop by 0.6% between May and November, compared to 4.4% over the same period in 2023.
The average price is now around €9,500/m2 but there are significant differences depending on the arrondissement, with the most sought-after 6th, 7th and 16th all rising this year.
Another leading property site, Meilleurs Agents, says “the worst is well and truly behind us” but it will be a few months before the effects of easier access to loans, reduced inflation and lowering of the central bank rates really take effect.
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Bubble burst
Property selling coach Maylis Guinebert, of Bordeaux-based AKompagn’Toit, said the “bubble burst” after a post-Covid boom and she has yet to see a reverse.
There is often a huge difference between advertised prices and actual sale prices, and negotiation remains essential, she said.
The market is still affected by deepening economic problems, political instability, and troubles in the construction sector. Trades unions had sounded the alarm but not been listened to, she added.
Another problem is increasing pressure for homes to meet high energy standards, which means there are many low-rated homes that owners are unable to renovate.
She said: “While a return to normal after a surge in prices was logical, few people had predicted what is happening.
“On the other hand, it’s a good time to buy and negotiate, provided you don’t have to sell in the short term.
"We’ll have to be patient before the market picks up. For the time being, sellers have to accept this downturn.”
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