Candidates for property have not regained sufficient purchasing power. According to the Crédit Logement/CSA Observatory, the much-hoped-for decline in interest rates only concerns a few basis points: the average rate, excluding insurance and all loan durations combined, rose from 4.18% to the fourth quarter of 2023 to 3.99% in the first quarter of 2024. For comparison, it only amounted to 1.05% in the last quarter of 2021.
Consequently, according to the assessment established by the Notaries of Greater Paris for the first quarter of 2024, the number of transactions fell by 24% in one year and 40% in two years. Sales of apartments fell by 23% year-on-year compared to 27% for houses. “The house market, which had benefited from a strong resurgence of interest post-pandemic, is more affected than that of apartments,” underlines Maître Elodie Frémont, spokesperson for the Chamber of Notaries of Greater Paris.
The share of houses in sales of existing housing has never been so low in 20 years (28.1% in 2023), breaking with the high point of 31.8% of house acquisitions in 2021. The decline prices, of almost 8% over one year, are not enough to rehabilitate buyers. They therefore buy smaller homes, sometimes sacrificing even a room in order to become owners.
On the apartment side, sales of 5-room apartments and more fell by 29% over one year, compared to -17% for studios. On the house side, the decline is -22% for 3-rooms and less, compared to -31% for 7-rooms and more. According to projections made from preliminary sales contracts, prices should stabilize in the coming months, without therefore restoring enough fluidity to revitalize activity.
In Paris, prices, at 9,490 euros per m² in the first quarter, should settle at €9,370 per m² in July, a drop of 7.6% in one year and 13.7% compared to the point high of November 2020 (10,860 euros per m²).
In the capital, prices vary from 6,940 euros per m² (La Chapelle district in the 18the arrondissement) at 16,380 euros per m² (Champs-Elysées district in the VIIIe borough). It’s the IXe district, which had soared in recent years, which recorded the biggest decline of the quarter, – 10.1%, knowing that seven districts (including six in the outskirts) showed an annual drop in prices of more than 8%.