According to the Notaries-Insee reference index published this Thursday, February 29, prices of old real estate fell by 4% last year. This fall is expected to continue over the coming months, in a sensitive context: access to credit has become more difficult, a direct consequence of the restrictive monetary policies implemented since the end of 2021. But this fall in prices marks a break with the past. , being all the more striking as the average value of properties was still increasing during the 2nd quarter of 2023.
This turnaround in the existing real estate market effectively puts an end to three consecutive years of price increases. Elodie Frémont, president of the “Real Estate Statistics” commission of the notaries of Greater Paris, observes that the year 2023 was “sunk in a crisis which had already been underway for two years and which is materializing”, noting that this crisis “is is accelerating, especially in terms of transaction volume.
Indeed, the difficulties surrounding access to credit have direct consequences on the number of transactions. In 2023, the latter saw their number plunge to 869,000, compared to 1.12 million in 2022. “Buyers must understand that their borrowing capacity is now reduced,” says Elodie Frémont, stressing that buyers must resolve to have a “substantial” contribution, sometimes with the support of “family assistance or a prior sale”.
The profile of buyers has evolved. Older than in the past, they also belong to the wealthiest socio-professional categories, observe professionals in the real estate sector. In this economic context, a change in their behavior is also noted. Elodie Frémont notes the development of a “rather worrying wait-and-see attitude” within the real estate market, in which owners and buyers are all waiting for more favorable conditions.
More wait-and-see, buyers also hold a new place in the negotiations. Buyers are “taking back control of the market, revisiting, regaining negotiating power,” notes Loïc Cantin, president of the National Real Estate Federation (Fnaim). The latter believes that the phase into which the old real estate market has entered constitutes the beginnings of an “adjustment of prices on the market”.
If this fall in prices allows buyers to regain purchasing power, it fuels the pessimism of notaries, who fear a continuation of this trend: “This change could have been analyzed as a Covid counter-effect […] but unfortunately, it is much more impactful,” analyzes Elodie Frémont, adding that “when we compare these figures to the average of the last ten years, the decline is still there.”
The fall in prices should continue this year, estimates Loïc Cantin, who envisages a drop of around 6 to 8%. A revealer of a structural crisis? No, believes Corinne Jolly, president of Individual to Individual, a site reserved for the sale and rental of real estate between individuals. “These are not years of crisis, these are normal years,” she notes, who, despite an “effectively striking decline,” believes that the market “landed on something that is not at all alarming “.
The fall in the value of real estate spares neither apartments (-4.1%) nor houses (-3.8%). The most remarkable drop was observed in Île-de-France – a region where real estate prices reach the highest peaks – as well as in inner Paris, the inner and outer suburbs. Loïc Cantin notes that “the declines are most pronounced where the markets have progressed the most”, that is to say in the largest cities in France, with Paris in the lead.
At a time of a global fall in prices, one French region stands out as an exception: Provence-Alpes-Côte d’Azur, where prices fell last year by only 0.6%, compared to 4 % on a national level. Several factors can explain this differentiation, among them the greater proportion of retirees – with more assets – as well as a good quality of life, very popular with buyers, who are always more eager to find accommodation on the Mediterranean coast.