Old property prices stabilise in the 3rd quarter, raising hopes of a market rebound

The sale prices of old homes, listed by the Notaires-Insee reference index published on Thursday, stabilized in the third quarter: -0,1% compared to the previous quarter, after having started to slow down earlier in the year.

Over one year, the drop in prices also eased and stood at -3,9%, after -4,9% in the second quarter and -5,2% in the first quarter of 2024. This is nevertheless the fifth consecutive quarter of price decline.

Elodie Frémont, president of the "real estate statistics" commission of the notaries of Greater Paris, sees a "small glimmer of hope" in the figures for the last quarter.

"We all hope that we have reached the points close to the historic lows and maybe we will finally bounce back," she said at a press conference.

The existing real estate market has suffered from the rise in interest rates, from 2022, which has reduced the borrowing capacity of French households.

The decision in early June by the European Central Bank (ECB) to start cutting rates was seen as a first factor in the market's recovery. But political uncertainty over the dissolution of the National Assembly, announced a few days later, has blocked any budding optimism among buyers.

Household purchasing power in real estate has nevertheless improved in recent months, thanks mainly to the drop in credit rates and the fall in real estate prices, according to Julien Lecumberry, economist for Crédit Mutuel Arkéa.

Now, buyers are "waiting" according to Elodie Frémont, and "worried" about the various political measures being studied at local and national levels, in particular the possible increase in taxes levied by departments on property purchases.

Number of transactions still low

As for the number of transactions, the situation is not improving. Sales recorded by notaries "continue to decrease", as has been the case "since the end of September 2021", notes the document published by INSEE.

At the end of September 2024, the number of transactions carried out over the last 12 months is estimated at 780.000, after 792.000 at the end of June 2024 and 825.000 at the end of March 2024.

In the Ile-de-France region, in the third quarter, transaction volumes fell by 10% over a year, and even if this decline "is moderating", "we cannot announce a rebound or a recovery", analyses Elodie Frémont.

The level of real estate sales by notaries in Greater Paris is currently 39% lower than the level in the third quarter of 2022.

For Loïc Cantin, president of the National Real Estate Federation (Fnaim), the conditions are not yet right for a market recovery, "we will only be able to recover volumes if first-time buyers return to the path of acquisition".

The number of transactions could fall further "in connection with political uncertainty, lack of confidence and visibility", which could slow down buyers, according to him.

In detail, the price drops are similar for houses (-3,9% over one year) and apartments (-3,8%), according to provisional data adjusted for seasonal variations.

Geographically, the value of old real estate in Ile-de-France is stabilizing (-0,1% over one quarter), after seven consecutive quarters of decline.

Compared to the third quarter of 2023, apartment prices fell by 5,2% in Ile-de-France and by 5,5% in Paris, where the average price per m³ stands at 9.520 euros.

Outside the Ile-de-France region, where prices have been falling since mid-2023, the drop is also 0,1%, but the Provence-Alpes-Côte d'Azur region saw a slight increase in prices of 0,2% compared to the previous quarter.

Apartments in Hauts-de-France and Auvergne-Rhône-Alpes are also increasing in value.

Julien Lecumberry predicts that "prices would fall less and less quickly", then stabilize in the first half of 2025, and that the number of real estate sales would remain "below the average level of the last ten years".

Illustrative image of the article via Depositphotos.com.