Real estate prices in Paris: what are the trends for 2024?
The year 2024 promises to be an extension of the difficulties encountered in 2023 with, however, positive signs for the Parisian real estate market. Between the post-pandemic recovery, preparations for the Olympic Games and new urban regulations, investors and future owners are wondering about the evolution of real estate prices in the French capital. This article explores the trends predicted for 2024, based on expert analysis and the latest market data.
A Look Back at the Last Quarter of 2023 of the Parisian Real Estate Market
The year 2023 was part of a dynamic contraction for the market Parisian Real Estate and Île-de-France, showing a significant drop in activity in the old housing sector. Between September and November 2023, only 31,910 transactions were recorded in Île-de-France, marking a fall of 30% or 13,840 fewer sales compared to the same period of the previous year, when 45,750 sales were recorded. This decrease in sales volumes is all the more remarkable as it represents a decrease of 25% compared to the average of the last ten years, thus underlining a particularly sluggish market.
This period of low activity is mainly due to the deterioration of household solvency, despite slightly positive signals from banking institutions and price declines observed on the market. These tariff adjustments, although widespread, do not succeed in offsetting the deterrent effect of the increase in Rate of Real estate credit, helping to keep the market in a state of lethargy.
The downturn in activity did not affect all market segments uniformly. Houses recorded a sharper drop in sales volumes, with a drop of 32% over one year, compared to 29% for apartments. This trend is even more pronounced in Petite Couronne, especially for the housing market, which is experiencing the biggest impact with a decrease of 35% year-on-year. Moreover, the capital itself is experiencing a less severe drop in activity than the rest of the region, with a decrease of 27%.
These figures reveal persistent trends that have emerged over several quarters, beyond the overall decline in activity. They Highlight the Challenges Facing the Parisian Real Estate Market and Île-de-France is facing, in a tense economic context and facing persistent obstacles to home ownership for many households.
The Beautiful Apartments and the Exceptional Properties in Paris Are resistant to the real estate crisis. The small segment of luxury real estate and flawless apartments that do not require work has seen its prices maintain and sometimes even increase slightly. This trend is expected to continue in 2024.
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Focus on Real Estate Loans
Access to Real estate credit is one of the most influential factors in the performance of the real estate market.
Evolution and prospects of real estate loans for individuals in 2023-2024
At the beginning of 2024, the Real Estate Loan Market For individuals registered significant adjustments, marked by an average rate of 4.15% in January, slightly down from 4.24% observed in December 2023. This decrease of 9 basis points is part of a context of stabilization after two years of rapid increase, reflecting a reversal in the trend in rates that peaked at the end of 2023. This trend coincides with an improvement in the profitability of new loans, supported by the stability of the refinancing rate of the European Central Bank, which facilitated an increase in the supply of credit by banks.
The fall in rates at the beginning of the year, earlier than the seasonal decreases usually observed in spring, testifies to the efforts of banking institutions to reinvigorate a market marked by sluggish demand. This strategy is necessary in the face of the deterioration of household solvency.
The number of loans granted rebounded in January 2024, with an increase of 16.5% in the number of loans granted compared to December 2023. This revival of activity, while promising, heralds a slow and hesitant recovery.
The Impact of the 2024 Olympic Games on Real Estate Prices in Paris
As We Approach Olympic Games 2024, projections concerning the Paris real estate market oscillate between optimism and caution. The Parisian Real Estate Market Is going through a crisis marked by a fall in prices of 5.5% over one year, falling under the combined effect of inflation and rising interest rates, plunging the average price below the threshold of €10,000 per m². This situation contrasts with the beneficial effect observed in other Olympic host cities, such as Sydney where Real Estate Prices increased by 60% in four years.
Seine-Saint-Denis is emerging as the major beneficiary of this global event, anticipating a significant increase in value thanks to investments and infrastructures dedicated to the Olympics. However, the challenge for Paris lies in its ability to reverse the current negative trend, despite the unfavorable economic and geopolitical circumstances. The examples of London and Sydney, where the Olympics led to a significant rise in real estate prices, offer hope for a repeat for Paris, even if the city must navigate a unique context of multiple crises.
The Olympics could attract a new wave of foreign buyers, potentially interested in properties in prestigious neighborhoods. Nevertheless, theEffect of the Olympics on the Paris Market remain uncertain.
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Influence of the Climate and Resilience Law on the Parisian Real Estate Market
The adoption of the Climate and Resilience Law Poses a Considerable Challenge for the Parisian Real Estate Market, particularly with regard to the least energy-efficient goods, referred to by the term “thermal strainers”. With the ban on renting properties classified “G” as early as 2025, followed by progressive restrictions for categories “F” and “E”, the pressure on owners to renovate their properties is intensifying. Jacques Baudrier, deputy mayor of Paris in charge of housing, express concerns about the impact of this legislation, predicting that a majority of “G” homes will not be renovated on time, thus risking removing up to 60,000 homes from the Paris rental market.
What is the impact on the selling prices of Parisian real estate?
It is difficult to say that the Climate and Resilience Law has a negative impact on Selling price. In the Apathy of Real Estate Market, this is an additional point that intensifies the gloom of investors. Some see it as an opportunity to make acquisitions of thermal strainers to be renovated at attractive prices. To then put them back on the rental market where demand exploded in Paris and the Paris region.
Several politicians are calling, with varying degrees of conviction, to relax the timetable for banning the rental of bad energy labels. When many actors complain about the lack of reliability in evaluating the energy performance of a property.
Opportunity for some, obstacle for others. This is a subject that will undoubtedly be at the heart of the Parisian and Île-de-France real estate market in the years to come.
What should we expect on the Paris real estate market in 2024?
A market that is slowly regaining its breath thanks, essentially, to an easing of access to credit and to the first drop in credit rates in 2 years. But it is important to remain cautious; although in the field, real estate agents and hunters agree that the market is dripping.
Is it time toBuy in Paris ? The best acquisitions are made in markets in crisis. It is also the time when buyers are rare. There is room, at the moment, to carry out great real estate transactions.
Most professional real estate players expect a recovery in 2025. We share their point of view.
Learn more:
- Looking for an apartment in Paris : What if you delegated?
- How and when to make a lower offer ?
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