According to the PAP research center, housing prices of the old stock increased by 1.7% year-on-year, indicating the beginning of a stabilization phase.
The dynamics in large metropolitan areas vary significantly. In most cities, prices range from 3% to +2% per year. Lille (+2.3%) and Paris (+1.9%) are among the major cities where a slight increase was recorded after several years of decline. At the same time, some agglomerations are continuing the correction phase, and prices there are still declining.
In Paris, the average price now reaches 9720 euros per square meter, which is 1.9% higher than last year. The growth occurred after a significant correction: in two years, the capital's market sank by almost 10%. Despite the positive dynamics, the recovery remains fragile. An excessively sharp increase in prices may again alienate buyers, especially young families and those who are buying housing for the first time, as their borrowing options are still limited.
One of the key factors in the resumption of demand was the improvement of credit conditions. After a sharp increase in rates in 2023-2024, the situation has stabilized: the average mortgage rates for 20 years are now about 3.3%. This expands the purchasing power of households. Buyers who were previously cautious are gradually returning to the market. It is especially important to bring back new customers who have been seriously affected by the tightening of banking conditions in recent years. Their presence provides the market with the necessary liquidity.
Thus, after a two-year correction, the French real estate market is entering a phase of gradual recovery, but the dynamics remain extremely heterogeneous depending on the city.
Source: My Sweet Immo
