The drop in prices in old real estate is marking time

The Notaires-Insee index published on Tuesday, which is a benchmark for its comprehensiveness, reports a 0,5% drop in prices in the second quarter of 2024 compared to the previous quarter, compared to -1,5% in the first quarter of 2024 and -1,8% in the fourth quarter of 2023.

The rise in prices, which has been ongoing since the end of 2015, has slowed down significantly since mid-2022.

Over one year, the market shows a decline of 4,9% in the second quarter of 2024, after -5,2% in the first quarter, with a drop of 5% for apartments and 4,9% for houses, according to provisional data adjusted for seasonal variations.

In the provinces, the decline eased over the period (-0,4% after -1,3% in the first quarter), as did in Île-de-France, where prices fell in the second quarter of 2024 to -0,9%, after -2,4% in the first quarter and -2% in the fourth quarter of 2023.

Over the year, prices in the Paris region recorded a decline of 7,2%, compared to 8,1% in the first quarter.

"We are feeling a slight tremor in the real estate market," commented Élodie Frémont, president of the "real estate statistics" commission of the notaries of Greater Paris during a press conference.

"The start of the school year could be the restart of the market," the president of the Paris Chamber of Notaries, Pierre Tarrade, told AFP.

This slowdown in prices is mainly linked to the fall in interest rates, notaries point out.

The average interest rate (excluding fees and insurance) stood at 3,64% in June, down 0,53 points from the peak level reached in January 2024.

"We've gotten through the worst"

"The horizon of an interest rate of 3% will continue to correct the market in the downward trajectory to which it has been exposed for more than 18 months," stressed Loïc Cantin, president of the National Federation of Real Estate (Fnaim), while the ECB should act on a new rate cut on Thursday.

"All the signals point to a market stabilisation to reach a level before the end of the year, or later," he said.

"We are past the worst. We are going to enter a slow stabilization phase," also estimated Thomas Lefebvre, scientific vice-president of the SeLoger-Meilleurs Agents group.

"We are on a landing," added Corinne Jolly, president of Particulier à particulier (PAP), while warning that "we should not expect" to return to the sales volumes of 2021-2022.

The number of transactions carried out over the last twelve months is estimated by notaries at 792.000 at the end of June, after 825.000 in March and 872.000 at the end of December, down 21% compared to the last twelve months and far from the 1,2 million sales recorded in 2021.

The Île-de-France region, with 106.000 sales recorded between July 2023 and June 2024, saw a 26% drop compared to the previous year.

"The real estate crisis is coming to an end, but not the housing crisis," warned Mr. Cantin.

"Political stabilisation, economic stabilisation and housing support are essential to allow the market to stabilise and restart under normal conditions," he continued.

The president of Fnaim calls on the next government to "act on all levels", particularly new construction and social housing, two sectors in crisis.

"No new market means no construction, which means no supply. And no supply means no supply," Corinne Jolly also stressed.