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What's happened? According to the National Federation of French Real Estate Agents (FNAIM), average monthly property prices in France have fallen after “several years of rises”.
In April 2023, they were down 0.3% from the previous month. Almost all sectors of the market have been affected by the drop, except for housing in tourist locations and the secondary housing market.
The reasons. A combination of factors - more expensive raw materials slowing down construction, inflation levels hitting households, and ecological laws limiting buy-to-let property owners – have combined to reduce property sales, which in turn has affected property values.
A drop in demand. Approximately 1,109,000 properties were sold in France in 2022, but FNAIM predicts that this figure will fall to 950,000 in 2023. While Paris has bucked this trend and seen an increase in the number of properties sold, many other departments France saw property sales drop.
Brittany, Normandy, and the wider Île-de-France regions are among the most affected, with buying activity falling between 12% and 17%. However, in general, tourist destinations and areas with high levels of second home ownership are less affected by the changes.
Annual price changes. It is important to remember that this decline is only on a monthly basis and that year-on-year trends (taking into account all the data for the last 12 months) still show an increase in house prices across France, up 4.5% compared with 6.3% at the beginning of February.
During the year, Paris, Lyon, Nantes and Toulouse experienced price drops. But prices rose in Nice, Marseille and Montpellier.
Forecasts. FNAIM estimates that overall demand could fall by 10% in 2023, correlating to a 5% decline in house prices.
Source: The Connexion
Photo by Alexander Kagan on Unsplash
