A drop in sales volumes now limited to 5% compared to last year
A low point therefore seems imminent, although it is not yet possible to know what market dynamics will prevail in a context that is still very uncertain.
While the drop in activity is still 7% for apartments in Ile-de-France, we are seeing a small increase of 1% in house sales in Ile-de-France.
Finally, and compared to the situation observed from August to October 2022 and its 40.100 sales, the drop in activity reached 34% (i.e. almost 13.600 sales lost).
Price developments increasingly moderate
Focus - Old housing in Ile-de-France: despite the fall in prices, real estate capital gains still exist over 10 years
Please note: Capital gains or losses are estimates made from average acquisition areas recorded on the database of the Notaries of Greater Paris (Base BIEN) in the 3rd quarter of 2024 and applied to previous periods; the average surface area of housing sold varies little over time. Prices are in current currency (without taking inflation into account) and correspond to the valuation of the Notaries-Insee indices, in euros per m2 for apartments and in unit budget for houses. The reasoning does not include acquisition costs, agency fees and possible borrowing costs which would draw different perspectives.
The continuous fall in sales prices over the last 2 years has caused systematic capital losses in the Ile-de-France region in the event of very rapid resale.
The rate shock suffered from the beginning of 2022 caused a large decline in sales volumes, weighing on the prices of existing homes. The fall in prices, which began 2 years ago in the Inner and Outer Suburbs and 4 years ago in the Capital, continued before giving way in recent months to more moderate developments.
Buyers required to resell within 2 years recorded capital losses in all departments of Ile-de-France. On average, these were €40.600 for apartments and €39.200 for houses in Ile-de-France.
But the holding periods for resold properties are in reality much longer (10 years for apartments and 12 years for houses[1]). The situation in the event of resale therefore remains generally more favourable, in the longer term. However, it depends on the department (the most expensive ones often experience variations, both upwards and downwards, earlier and more extensively) and the type of housing (the price peak was later for houses).
Capital losses observed in Paris and Hauts-de-Seine for the resale of an apartment in 5 years, but capital gains still widespread for resales in 10 years
In 5 years, the price per m2 of apartments in the Paris region has fallen from €6.250 to €6.150, representing an erosion of 1,7% and a capital loss of €5.800 per property on average, but with significant departmental disparities.
In the capital, prices, which were very high, have been trending downward since the 4th quarter of 2020. In 5 years, they have fallen by 5,6% and by €570 per m2 (an average loss of €31.350 per property). In Hauts-de-Seine, there is also a very slight capital loss (-€3 for a 720 m62 apartment). On the other hand, the other departments of Ile-de-France are still positive, with capital gains ranging from €5.000 in Seine-Saint-Denis to €11.700 in Yvelines per property in 5 years.
In 10 years, the price per m2 of apartments in the Paris region has increased from €5 to €390 (+6%). A home resold after 150 years therefore generates a capital gain of €14,1 per m10 and €760 on average. The price changes for apartments in the Greater Paris Region (+2% in 44.080 years) remain much more moderate than in the Inner Paris Region (+6,7%). The apartment market in the Greater Paris Region remains more relaxed and fluid thanks to a diversified offer and more moderate prices. This ultimately leaves less significant price variations, both upwards and downwards, and more limited capital gains. The latter range between €10 in Seine-et-Marne and €13,5 in Yvelines.
In 10 years, Paris has maintained the highest capital gains in the Ile-de-France region. On the one hand, the price increase there was 17,6% and therefore proportionally higher than elsewhere. And on the other hand, it was applied to a price per m2 much higher than what is observed in other departments. In 10 years, the capital gain reached €1.420 per m2 and €78.100 for a 55 m2 apartment in the Capital.
Capital gains at 5 years as at 10 years for houses
The resale of a house after 5 years allows you to generate capital gains in all departments of Ile-de-France (€18.600 on average), from €13.800 in Seine-Saint-Denis to €33.800 in Hauts-de-Seine. The increase in house prices was later than that of apartments and driven by a strong attractiveness of this type of property during the COVID period. In 10 years, capital gains on resale vary between €23.500 in Seine-et-Marne and €89.500 in Hauts-de-Seine.
In conclusion, even if housing prices have been falling for two years, there are still capital gains to be made on resale within the framework of a holding period of 10 years.
[1] Notarial real estate databases track real estate transactions for consideration. They therefore make it possible to calculate the holding periods for properties that are actually sold. But this does not take into account all the properties that are not sold and are kept for a very long time as assets by their owners or that are passed on by inheritance.
Illustrative image of the article via Depositphotos.com.