The year 2023 was particularly harsh for the French real estate market, which led to a drop of up to 8% in some cities located in mainland France. Several factors are at work behind this market decline.
According to a study published on January 2, 2024 and reported by Mediacene, it is the city of Nantes where real estate has fallen the most in 2023 – 8% in one year (average price per square meter is €3,562 /m2). Still according to the same source, this decrease is notably due to the tightening of credit conditions as well as the limited solvency of households, measures that have had a strong impact on housing demand.
It is the city of Lyon that comes in second place among the cities where the drop in real estate prices has been the most significant, the average price per square meter is now €4,798/m2 (i.e. a decrease of -5.9%). On the last step of the podium, Paris, with a decrease of 5%, the price per square meter thus rises to an average of €9,644/m2. Bordeaux and Rennes come fourth and fifth in the ranking with decreases of 4.9% and 4.3% respectively, thus increasing the average price per square meter to €4,541/m2 for Bordeaux and €3,958/m2 for Rennes.
In the second half of these top 10 French cities where real estate prices fell the most in 2023, we find Toulouse with a decrease of 3.5% (average price per square meter €3,555/m2), Marseille with a decrease of 2.8% (average price per square meter €3,571/m2, Strasbourg with a decrease of 2.5% (average price per square meter €3,879/m2) and finally Lille and Nice with decreases of 0.9% and 0.4% respectively (average price per square meter for Lille €3,658/m2 and €5,046/m2 for Nice).
Reasons for the decline in the French real estate market
In 2023, real estate sales fell by almost a quarter compared to the previous year. In fact, sales fell below the 900,000 sales threshold. In addition, prices in France also fell by 1.8%, which some real estate valuation experts suggest has not happened since 2013.
Several factors played a decisive role in the decline of the real estate market, including the tightening of real estate lending conditions, the limited solvency of households, and the country’s economic and political situation. Indeed, all these parameters have deterred some potential buyers. On the sellers’ side, they were forced to lower their prices to adapt to market prices.
