After years of soaring, old real estate fell sharply in 2023 according to notaries and INSEE

The fall is all the more spectacular as prices were still increasing in the 2nd quarter of 2023, after three years of surge following the Covid-19 health crisis.

The year 2023 "is plunged into a crisis which had already been underway for two years and which is materializing", warned Elodie Frémont, president of the real estate statistics commission of notaries of Greater Paris, at a press conference. “Its specificity is that it is accelerating, especially in terms of transaction volume.”

The number of transactions recorded in 2023 has indeed plunged, to 869.000 compared to 1,12 million a year earlier.

Consequence of the rapid rise in interest rates, which made access to borrowing much more difficult.

“Buyers must understand that their borrowing capacity is now reduced,” observes Ms. Frémont. “They must understand that their contribution must be substantial, so family assistance or a prior sale is often required,” she explains, highlighting an increase in the median age of buyers and an over-representation of the most socio-professional categories. more affluent.

"Inflection"

The fall in prices, according to provisional data adjusted for seasonal variations, concerns both apartments (-4,1%) and houses (-3,8%).

It should continue in the coming months, according to the Notaries of Greater Paris and the actors interviewed by AFP.

“We are really at the beginning of the readjustment of prices on the market, which should continue,” said Loïc Cantin, president of the National Real Estate Federation (Fnaim), who forecasts a drop of 6 to 8% in prices in 2024.

“Buyers, today, are regaining control of the market, revisiting, regaining negotiating power,” he notes. “The only way they will regain purchasing power is if prices continue to fall.”

Notaries were rather pessimistic about the trends. “This inflection could have been analyzed as a Covid counter-effect, or in any case after three so-called euphoric years, but unfortunately, it is much more impactful, because when we compare these figures to the average of the last ten years, the drop is still there,” said Elodie Frémont.

She sees the emergence of "a wait-and-see attitude which is rather worrying", owners and buyers waiting for more favorable market conditions, and also to see more clearly on legislative developments, particularly on energy performance.

A speech moderated by Corinne Jolly, president of Particulier à individu. “These are not years of crisis, these are normal years,” she assures.

“There is a drop which is indeed striking, we can clearly see that the curve is falling quickly, but we are landing on something which is not at all alarming”, she says, the volumes having fallen back to the level of 2016-2017 after breaking records in 2021.

The PACA exception

Île-de-France, where real estate prices are the highest, is also the region where the decline is most marked (-6,9%), and in proportions comparable to Paris and in small and large crown.

“Where the markets had progressed the most, notably Paris and the first ten large cities, that is where the declines were most evident,” adds Mr. Cantin.

This is also evidenced by Lyon, where apartments lost 9,3% over one year despite a market known to be very tense.

The exception which confirms the rule is the Provence-Alpes-Côte d'Azur region, where prices only erode by 0,6%.

Loïc Cantin explains this by the high proportion of retirees, with greater assets and less dependent on credit conditions.

Corinne Jolly adds the criterion of quality of life, which has become more important for buyers and which is observed in the dynamism of coastal communities.

Illustrative image of the article via Depositphotos.com.