The real estate market in France has gone through an unusual sequence in recent years, marked by price adjustments, a decline in transactions, and a rise in interest rates. Measuring the extent of these changes requires cross-referencing several indicators: sales volumes, price per square meter in the old market, financing conditions, and territorial disparities.
This overview of the real estate sector in 2024 focuses on the structural data and the gaps that reveal more than a simple economic summary.
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Real estate prices in France: differences between houses and apartments
The distinction between houses and apartments remains a reliable marker for interpreting the real estate situation. Houses, long buoyed by the post-lockdown effect and the search for space, have seen their prices correct earlier than those of apartments in several regional metropolises.
City-center apartments, on the other hand, have held up better in tight areas where rental demand supports valuations. This divergence is observed quarter after quarter in the data published by notaries.
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| Indicator | Houses (old) | Apartments (old) |
|---|---|---|
| Price trend in the recent period | More marked correction, especially in suburban areas | Relative resistance in major urban areas |
| Volume of transactions | Significant decline, extended selling times | Moderate decline, rental demand as a safety net |
| Dominant buyer profile | First-time buyers hindered by rates | Investors and second-time buyers |
| Sensitivity to interest rates | High (higher borrowed amounts) | Medium (lower entry tickets in absolute value) |
This table summarizes qualitative trends observed in the old market. Houses are more affected by the rise in rates than apartments, mainly because the amount borrowed is on average higher.
To follow detailed developments and analysis of the different sectors, the real estate sector on Veridictus regularly compiles economic data by segment.
Interest rates and transaction volume: the direct link
The rise in mortgage rates has been the dominant factor in recent times. After several years of exceptionally favorable conditions, monetary tightening has profoundly changed households’ borrowing capacity.
The loss of purchasing power has significantly reduced the number of transactions across the territory. Notaries have recorded a notable decline in sales volume in the old market, a phenomenon affecting both small municipalities and metropolises.
The mechanism is mechanical: with the same monthly payment, a higher rate reduces the capital that can be borrowed. Buyers adjust their searches downward, which extends selling times and pushes some sellers to reconsider their prices.
- First-time buyers are the most affected, as they almost entirely depend on credit to finance their purchase and rarely have a substantial down payment.
- Second-time buyers partially compensate through the proceeds from selling their previous property, but they also suffer from the market contraction.
- Investors make different choices: some turn to properties with corrected prices, while others suspend their projects awaiting stabilization of conditions.
On the other hand, signals of stabilization, or even a slight easing of rates observed at the end of the period, have begun to bring some buyers back to the market. The volume of transactions reacts with a delay of several months to shifts in financing conditions.
Real estate situation by territory: very different realities
Analyzing the real estate market at the national level masks considerable disparities. Major metropolises, medium-sized cities, and rural areas do not follow the same trajectory.
Paris has experienced a more visible price correction than other major cities, after reaching very high levels. This decline has given buyers a bit more leeway, but has not made the Parisian market accessible to the majority of households.
Medium-sized cities have resisted better in terms of prices, particularly those located on efficient transport routes or with a dynamic job pool. The phenomenon of geographical relocation, initiated during the health crisis, continues to support demand in these areas.
Rural areas present a more mixed picture. Attractive sectors (coastal, mountain, proximity to a metropolis) maintain their prices. Less connected territories see selling times extend and prices stagnate or even decline.
Old housing: the segment that concentrates adjustments
The old market represents the vast majority of real estate transactions in France. Therefore, it is in this segment that price and volume changes are most visible.
Old homes requiring energy renovation are experiencing an increasing depreciation. Buyers now factor in the cost of renovations in their calculations, which weighs on the prices of energy-inefficient properties.
Properties that have already been renovated or that show good energy performance sell faster and at prices closer to initial estimates. This valuation gap between efficient properties and energy-consuming properties constitutes a structural trend, not just a passing fad.
Market outlook: signals to watch
Three variables will determine the future. The trajectory of interest rates remains the most closely monitored parameter by market players. A continued easing, even modest, could revive transaction volumes.
Energy regulations continue to transform the real estate stock. The gradual ban on renting the most energy-consuming homes pushes landlords either to invest in renovations or to sell, which feeds the supply in the old market.
The behavior of sellers constitutes the third factor. As long as the gap between sellers’ expectations and buyers’ purchasing capacity remains too wide, the market operates slowly. The adjustment of sale prices to the new financing conditions takes time, often several quarters.
The real estate market in 2024 is therefore viewed through these three overlapping lenses: rates, regulation, seller psychology. Notarial data, published quarterly, remains the most reliable source to measure where this adjustment truly stands.