Historic fall in real estate sales in 2023 according to the sector federation

“This market has experienced an extremely brutal deceleration, the biggest drop in sales in 50 years,” commented Loïc Cantin, president of Fnaim, during a press briefing, who predicts a continuation of this decline in 2024 (-10% ).

In one year, the market recorded 240.000 fewer sales compared to 2022, a situation which practically concerns “all of France”.

“This deceleration is explained by the combined effect of inflation, the rise in interest rates and the growing difficulties of access to real estate credit,” notes Fnaim, recalling that the French have lost “15% of real estate purchasing power in two years.

“The detonator of this crisis was the rapid increase in interest rates, with borrowing capacity falling by -25% since January 2022,” also underlined Loïc Cantin.

However, according to him, this is not "an alarmist figure, but a regulation, a readjustment perhaps necessary" after the prosperous years 2020-2022.

“Comfort sales are becoming rarer, forced sales remain,” he commented.

Prices are falling across most of the country, particularly in large cities, and notably in Paris (-5,7%), where they have fallen below 10.000 euros per m2, as well as in the Parisian suburbs. (-3,6%).

In the top ten provincial towns, prices fell by 2,6% in one year, compared to only -1% for all of France. “The cities experiencing the greatest declines are those which have experienced the greatest increases,” notes Fnaim.

Boosted by falling interest rates, prices have continued to increase since 2009.

The only exceptions are ski and seaside resorts, as are most of the Mediterranean coast and Corsica.

Another observation: the shortage of properties for sale is now accompanied by a shortage of properties for rent.

For 2024, the federation anticipates a drop in prices of -5 to -7% which should take over from the drop in volumes, a classic phenomenon in real estate.

It also expects interest rates to stabilize at 4% in the first quarter, which should “give some fresh air to the market”.

Illustrative image of the article via Depositphotos.com.