Volume of real estate transactions in France in 2024: Assessment and outlook
Discover the review of real estate transactions in France for 2024. Analysis of trends, decline in transaction volume and prices of existing homes, as well as the outlook for the end of the year.
Introduction
The year 2024 marks a turning point for the French real estate market. After a period of sustained growth, the volume of real estate transactions has declined significantly, according to the latest data published by French notaries. This trend has implications for prices, housing affordability, and future prospects for buyers and sellers. As of the end of September 2024, the number of transactions is estimated at 780,000, a 17% decrease compared to the previous year . This article reviews the transaction volume, price fluctuations, and the changes expected in the coming months.
Volume of real estate transactions in 2024
A significant drop in transactions 📉
The volume of real estate transactions in France, across all categories, fell by nearly 17% between September 2023 and September 2024. In 2024, the number of transactions reached 780,000, compared to 935,000 the previous year. This significant decline marks a return to volumes similar to those observed at the end of 2015 (approximately 790,000 transactions). This decrease reflects a more challenging economic climate, characterized by rising interest rates and persistent inflation, which are impacting household purchasing power.
A general decline but a slow recovery to come ⏳
Although trading volumes have fallen, some stabilization appears to be emerging by the end of 2024. However, forecasts remain cautious, with the market still under pressure due to economic uncertainties and the European Central Bank's (ECB) monetary policy. On the other hand, some regions could experience a slight recovery depending on local attractiveness and price adjustments that have already taken place.
Prices of existing homes in 2024
A drop in prices for older apartments and houses 📊
Prices for existing homes in metropolitan France have fallen by 3.9% in one year, for both apartments and houses. This price decline is occurring within a context of economic slowdown, where buyers are more cautious, thus reducing demand. Homes, whether apartments or houses, are no longer generating the same enthusiasm as before.
The most dynamic regions in terms of transactions are also experiencing a price decline, although this may be less pronounced in some popular areas, such as Paris or the French Riviera, where prices remain relatively stable despite the general trend.
The impact on the house and apartment market 🏠
For older apartments, the average price remains higher than that of houses, but the decline is also significant in this sector. Older houses have experienced a slightly sharper drop in some rural areas, where demand is lower. In contrast, in urban areas, prices have remained relatively stable, although a slight decrease has been observed in certain market segments.
Housing accessibility in 2024
A slightly increased amount of financeable land 📏
The price decrease, however, was not enough to offset the rise in interest rates, which directly impacts household purchasing power. Nevertheless, a slight increase in the size of properties that can be financed was noted. In 2024, the average size of a property that can be financed for an existing apartment is 55 m², an increase of one square meter compared to the previous year. For existing houses, the size of the property that can be financed reaches 92 m², 3 m² more than in 2023. This increase is small, but it reflects a slight easing of the pressure on households, who now have to contend with higher interest rates and stricter borrowing criteria.
Regional disparities 🌍
Housing affordability varies considerably by region. Major metropolitan areas like Paris, Lyon, and Marseille continue to experience relatively high prices, even during periods of economic slowdown. Conversely, rural and suburban areas are seeing more significant price decreases, which could offer attractive opportunities for buyers seeking larger properties at more affordable prices.
The outlook for the real estate market in 2024
Signs of stabilization 🔄
Despite a market that remains under pressure, the latest figures suggest signs of stabilization. Experts agree that the housing market could stabilize in the second half of 2024, with a gradual recovery in transaction volumes starting in early 2025. However, this recovery will not be uniform and will depend on monetary policy, interest rates, and the economic recovery.
Potential buyers will need to be vigilant in the face of continued increases in borrowing costs, while sellers will need to adapt to weaker and more selective demand.
The resilience of the luxury market 🏡
The luxury market appears less affected by the general decline in transaction volumes. High-end properties, whether prestigious homes or luxury apartments, continue to attract an international clientele, less impacted by local economic fluctuations. In this sector, demand remains stable, and prices are often less sensitive to declines than in the traditional real estate market.
Conclusion
In 2024, the French real estate market experienced a marked slowdown, characterized by a decline in transaction volume and prices for existing homes. However, the gradual stabilization of prices and the increase in affordable housing size for certain types of properties offer positive prospects. The market remains under pressure, but with adaptation from market participants, a recovery could emerge by 2025. Rural and suburban areas benefited more from the price decrease, while major metropolitan areas experienced a less pronounced decline, and the luxury real estate market remained relatively stable.
Sources and links:
- Notaries of France – 2024 Real Estate Report : 2024 Real Estate Report on Notaires.fr
- Bank of France – Economic Outlook : Bank of France – Outlook
- The Real Estate Price Observatory : Real Estate Price Observatory
