French notaires have an ‘optimistic’ outlook on the French property market, according to their most recent report.
Despite low sales and prices, the level of falls in both are slowing down, pointing to a turn in market trends expected to continue into 2025.
The Notaires de France – consisting of all notaires in the country – release a quarterly report on the property market in France.
It is the most comprehensive information available on the state of the market as it includes data from the sale of all non-new builds, as well as information on areas such as mortgage rates and construction of new-build properties.
However, due to the time it takes to compile, it covers the period around two quarters behind the date of its release. The most recent complete data looks at the period to June 2024, although there is some preliminary information leading up to October 2024.
Below, we look at the six key points highlighted in the data.
Cause for optimism despite sales slump
Figures indicate that 780,000 properties were sold between August 2023 and August 2024, showing a continuing decline from previous figures.
This is the lowest figure since the beginning of the market slump at the end of 2021, where over 1.2 million properties were sold within a 12-month period between August 2020 and 2021.
However, year-on-year drops in sales numbers in July 2024 and August 2024 (compared to 2023) were below 20% – figures not seen since autumn 2023 – indicating that the market is picking up.
“The property market finally seems to be coming to the end of its downward cycle after two years of steep falls,” the notaires said.
Interest rate cuts by the European Central Bank and an expansion of zero-interest home loans should help see the number of mortgage offers increase alongside the general upturn.
Confidence in the housing market is still low, however in September 2024 it rose for the third consecutive month according to national statistics body INSEE.
“Optimism, albeit measured, is now being seen,” the notaires concluded.
Price drops in all areas…
A map of the fall in house prices between spring 2023 and 2024 shows only three cities in mainland France saw house prices rise in this time.
However, compared to previous releases of figures from this year where multiple cities saw prices slump by more than 10% in a 12-month period, only Nantes in north-west France has continued to see house prices fall at this level.
You can read our article on price changes including the cheapest and most expensive areas in which to buy a house in the article below. This includes a map of average price values throughout France
Read more: MAP: house prices fall in France - see how your area fared in new notaire data
The fall in the price of flats is more varied with some areas seeing prices drop nearly 20%. However many areas saw near-stable prices.
Tourist areas saw prices rise throughout the slump, notaires previously noted.
…but are these soon to end?
Despite this, the successive price drops that have been a feature of the market for over a year are slowly coming to an end.
Between the first and second quarter of 2024, prices fell by -0.5% for all non new-build properties (homes and flats).
In comparison, between the final quarter of 2023 and the first of 2024, this drop was -1.6%.
Year-on-year figures for the second quarter of 2024 (compared to 2023) show an annual fall of -5%, compared to -5.2% for the first quarter of 2024 (compared to 2023).
Predictions from notaires is that this could be as low as -2.6% year-on-year by November 2024, signifying that prices have begun to rise in the summer of this year.
The recovery and more people looking to buy – due to interest rates and increasing access to mortgages – means that prices can again become competitive, with sellers not being forced to lower prices to sell in a stagnant market.
New price standards in Paris?
Paris is also seeing an increasingly optimistic picture. However price falls have been more severe in the capital and surrounding regions.
Year-on-year price falls in the Île-de-France region reached -7.2% in the second quarter of 2024 (compared to -5% nationally), and were -0.9% between the first and second quarters of 2024 (compared to -0.5% nationally).
By November 2024, year-on-year falls in the city and inner suburbs for houses is expected to be between -4.5% and -4.3%, but only -1.8% for flats (the main form of accommodation within the city proper).
This implies that prices may be stabilising in the city, with the price per m² of a flat now €9,430.
This is almost twice as much as anywhere else in the country, however is nearly €1,000 per m² less expensive than in years prior to the current slump.
Read more: Second home US buyers resist French property slump
Elderly people selling more
The rates at which each age group sold their properties was mainly stable between 2019 and 2023 however since the start of 2024 there have been significantly more sales from elderly owners.
Some 56% of overall sellers comprise those aged 60+, up 4% from the beginning of the year.
This is most noticeable in the 70+ group, which have seen an increase by 3% in this time, with one-third of all sales being made by those of this age.
Those aged 50 - 59 made 16% of sales, ages 40 - 49 made 14%, and 30 to 39 12%. Those aged 30 and under accounted for 2% of overall sales.
The average age of a person selling property in France is now 61 compared to 59 years and 10 months at the same point in 2023.
Home loans increase as mortgage rates drop
There has been “a clear recovery trend” in mortgage lending.
A market low of €6.9 billion of outstanding mortgage loans in March 2024 has now risen to €9.8 billion in August 2024.
Despite a higher figure in July 2024 (€11.3 billion) it shows that in general more loans are being offered to replace outstanding mortgages coming to an end.
Interest rates at the end of August 2024 fell to 3.59%, over 0.5% less than their peak at the end of 2024 and less than in August 2023.
It is the eighth successive month that mortgage rates fell with further reductions predicted until the end of the year.
Banks must follow rules on those to whom they can offer mortgages, based on financial criteria such as income levels and the price of the property being purchased.
Government rules allow banks to deviate from this criteria in up to 20% of cases – mostly to help first time buyers. However currently banks are only allowing this in 15% of applications.
This is viewed as a sign that banks are confident with the market and do not need to work to the maximum limit to keep mortgage applications high.
