The French Real Estate Market Shows Signs of Recovery!
The French real estate market is gradually bouncing back! After a period of slowdown, buyers are returning, though trends differ by region. This renewed interest is partly due to the recent drop in interest rates, offering more favorable opportunities.
First-time buyers, who faced rising prices from 2010 to 2020 and struggled with monthly payments often higher than rent in 2022, are now regaining confidence thanks to the rate reduction. They, along with second-time buyers, are once again pursuing real estate projects, as the lowered monthly payments allow them to consider changing homes without heavy financial strain.
This decrease in interest rates has slightly improved real estate purchasing power, enabling households to acquire larger living spaces. In a market where every square meter is valuable, this trend may encourage more buyers to take the leap into property investment.
Resilience of Prices in the Real Estate Market Despite Localized Declines
Although the real estate market is seeing price drops in several regions, these adjustments have not been enough to boost transactions, which were down by 20% in the first half of 2024.
Price variations are uneven across regions: some areas are holding steady with stable or slightly increasing prices (+3%), while others are experiencing more significant declines, reaching -8%.
A Seller-Dominated Market for Existing Properties
Despite price fluctuations, the market for existing properties remains favorable for sellers, who generally fall into one of several categories:
- The Opportunistic Seller: Hopes to sell above market value, relying on buyers willing to pay a premium.
- The Hesitant Seller: Monitors price and interest rate fluctuations closely, uncertain about selling in a volatile market.
- The Urgent Seller: Needs to sell quickly and accepts market-rate prices to close the deal without delay.
A Possible Rebound in 2025?
With prices gradually stabilizing and improved credit access, a more dynamic recovery could be on the horizon for 2025. This could bring a balanced market between buyers and sellers. However, caution remains essential amid economic uncertainties and potential changes to financial regulations under the new government, which could impact the market.