Property prices are holding up, with the exception of Ile de France

The number of sales is falling, but not the prices

The real estate market at the end of this year reflects a landscape of nuances, where long-term stability and growth are hidden behind sometimes brutal adjustments.

Despite the general perception of a declining market, last year revealed some resistance in property prices across the French territory (-0.3% between December 2022 and December 2023). Contrary to expectations, the decline in prices was not as significant as expected, with the exception of the Île-de-France region, where the decline was significant over one year (-3.5%).

However, this decline remains largely insufficient to offset recent rate hikes and skyrocketing prices in recent years. If we go back five years, prices still show a very significant increase (+22.3%).

These numbers seem to indicate a strong wait-and-see attitude from both sellers and buyers. Over the course of one year, sales fell by an average of almost 18% across France and by almost 20% on the Ile de France! The market has seized up between sellers who don’t want to lower their prices (yet) and buyers who are trying to find financing. If this trend continues, the decline could accelerate in the coming months, even though rates appear to have peaked.

Prices in overseas departments and regions continue to rise significantly, by 5.2%. This upward trend is also evident in ski resorts, where prices rose by 4.1%, while resorts saw a 2.1% increase in apartments to a slightly lesser extent.

Ile de France goes down, Cote d’Azur goes up

The most significant decreases in apartments are in Lyon (-6.8%), Paris (-5.3%, with an average price still above 10,000 euros per m2), but also Limoges (-7.9%), Avignon (-7, 3) , Bordeaux (-4.7%) and many Parisian suburbs: Colombes (-6.7%), Issy-les-Moulineaux (-7.2%), Saint-Maur-des-fossés (-7.8 %), Levallois-Perret (-5.4%) ), Neuilly sur Seine (-5.3%), Nogent-sur-Marne (-5.6%)…

Although these figures are significant in one year, they are nevertheless placed in a wider context, where the five-year development remains impressive.

However, the most striking in this context is undoubtedly the still dazzling progress of some cities, especially on the Mediterranean coast, each of which has seen a remarkable increase despite a sometimes uncertain context: Antibes (+8.3%), Fréjus (+6.6%) ), Perpignan (+4.7%) and Nice (+4.2%) are almost the exception in the market with Aix-les-Bains (+7.1%), Niort (+5.1%) and Reims (+4.5 %).

Rents continue to rise, improving rental potential

For people who choose to invest in a rental, price developments have little meaning unless they are compared to rent developments. However, it is clear that these continue to increase in the vast majority of cities, which actually improves the potential rental yield.

Only some municipalities such as Bordeaux (-0.5%) and Reims (-0.3%) showed a decrease among the 70 cities studied, among which the Paris suburbs are overrepresented: Montreuil (-6.9%), Versailles (-1, 9%) , Asnières-sur-Seine (-1.3%), Courbevoie (-0.6%), Rueil-Malmaison (-2.3%)…

Potential gross returns from apartment rentals are generally around 4.8%. The “best” cities have a theoretical potential of up to 9.8% in Mulhouse, 8.3% in Saint-Etienne, 7.8% in Perpignan and 6.7% in Cholet.

Some municipalities still stand out as smart choices, a testament to the market’s ability to offer profitable opportunities, especially to those who know where to look. However, beware of the gap that can exist between theory and practice: the acquired accommodation must of course suit potential tenants both in terms of location and layout. We must therefore remain cautious and look at the local study to avoid disappointment.

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