In Ile-de-France, the most populous and economically significant region of the country, prices for secondary real estate fell by 5.24% year-on-year, reaching 6150 euros per square meter, according to the Notary Chamber of Paris. In Paris, prices declined for 13 consecutive quarters, and in the 3rd quarter of 2024 decreased by 5.56% year-on-year, bringing the average price to 9520 euros per square meter.
The forecasts of the Supreme Council of Notaries (CSN), based on preliminary contracts, indicate that the 4th quarter of 2024 will show a moderate decrease in prices for secondary housing, to -2.1%. According to forecasts, the rate of decline will continue to slow down and will reach -0.7% year-on-year in the 1st quarter of 2025.
After two years of decline, there are signs of stabilization by the end of 2024. The French National Federation of Real Estate (FNAIM) reported that as of January 1, 2025, the average price of residential real estate across the country was 2,930 euros per square meter, a slight decrease of 0.8% year-on-year. Looking ahead, FNAIM expects a gradual recovery, with prices stabilizing in the first half of 2025, followed by 1% year-on-year growth in the second half. According to FNAIM, the pace of market recovery will largely depend on mortgage rates and financing conditions, which are expected to improve during 2025. In addition, geopolitical events and domestic housing policy will play a crucial role in shaping the market trajectory.
Market history
From 2012 to 2015, the French real estate market experienced a recession caused by rising interest rates, tighter credit conditions, and reduced tax benefits. Prices for apartments and houses decreased by an average of 1.7% per year. The situation has been improving since 2016. The upward trend continued even during the pandemic, when price growth strengthened to 6.4% (6.3% adjusted for inflation) in 2020 and to 6.9% (4.1% adjusted for inflation) in 2021, which was the highest annual growth since 2010. In 2022, the market slowed down, nominal prices increased by 4.69% compared to the previous year, but decreased by 1.3% in real terms. The slowdown continued throughout 2023, and by the 4th quarter of 2023, prices for second homes decreased by 3.88% year-on-year (-7.33% adjusted for inflation). At the same time, construction activity reached its lowest point since 2000.: Both the permits granted and the new projects were significantly below the previously established baseline.Home sales
According to the General Council for Environment and Sustainable Development (IGEDD), as of November 2024, the total number of sales of secondary real estate in France amounted to 778,000 units, which is 11.99% less than in the same period a year earlier. The decline by November 2024 continued for 29 consecutive months. CSN assumes that sales volumes may have bottomed out and expects to stabilize.
"The real estate market finally seems to be reaching its lowest point after two years of sharp and dizzying decline," CSN noted in its latest report. The Council attributes its optimism to the stabilization of real estate prices and the continued reduction in interest rates, supported by the recent statement by the European Central Bank. In addition, lower inflation in the eurozone and France increases affordability, gradually restoring people's purchasing power. FNAIM expects volumes in the secondary housing segment to increase by 6% during 2025, reaching about 825,000 units.
Rental housing
In 2024, according to preliminary data from INSEE, 40.3% of residential buildings in non-island France were rented, 22.8% of which were in the private rental sector, and 17.4% were in the public rental sector. In both sectors, the INSEE rental index stabilized during the first three quarters of 2024 after a period of rapid growth in 2022-2023. The overall rent index increased by 2.5% year-on-year in the third quarter of 2024.A market analysis conducted by Global Property Guide in December 2024 showed that the highest average asking rental rates were observed in the markets of Paris, Nice and Lyon. In these cities, the average monthly rental rate for a two-room apartment was 2,587 euros, 1,490 euros and 1,289 euros, respectively.
Source: Global Property Guide
