For 2024, FNAIM expects a price decline of -5 to -7%.
A “historic collapse”. The National Real Estate Federation (Fnaim) announced on Tuesday 16 January that sales of existing properties in France fell by 22% in 2023, with 875,000 transactions, while prices are expected to fall in 2024.
“This market has been experienced
A very brutal recession, the biggest drop in sales in 50 years
“, commented Loïc Cantin, president of Fnaim, during a press briefing, who predicts this decline to continue in 2024 (-10%). In one year, the market recorded 240,000 fewer sales compared to 2022, which is a practically alarming situation .the whole of France”.
“This can be explained by recession
The combined effect of inflation, rising interest rates and increasing difficulties in obtaining real estate credit
“, Fnaim notes, the French have “lost 15% of real estate purchasing power in two years.” “The reason for this crisis was the rapid increase in interest rates, below the borrowing capacity -25% from January 2022” also underlined Loïc Cantin.
“Changes may be necessary”
However, according to him, this is “not an alarmist figure, but a regulation, possibly a readjustment” after the prosperous years of 2020-2022. “Comfort sales are becoming rarer, forced sales remain,” he commented.
Prices are falling in most regions, especially in the big cities, and especially in Paris (-5.7%), where they fell below 10,000 euros per m2, as well as in the Parisian suburbs (-3.6%).
In the top ten provincial towns, prices fell by 2.6% in a year
Fueled by a fall in interest rates, prices have continued to rise since 2009. The only exceptions are ski and seaside resorts, as well as most of the Mediterranean coast and Corsica.
Another observation: A shortage of properties for sale is now accompanied by a shortage of properties for rent.
For 2024, the federation expects a price decline of -5 to -7% that should be offset by a decline in volume, which is a classic phenomenon in real estate. It also expects interest rates to stabilize at 4% in the first quarter, which “should give some fresh air to the market”.
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