The Harsh Reality of the French Real Estate Market in 2023: Declines and Factors Explained

2024-01-22 15:10:02

The year 2023 was particularly harsh for the French real estate market, leading to declines of up to 8% in certain cities located in mainland France. Several factors come into play in this market decline.

According to a study published on January 2, 2024 and reported by Mediaseine, it is the city of Nantes where real estate has fallen the most in 2023 – 8% in one year (the average price per square meter is €3,562 /m2). Still according to the same source, this drop is notably due to the tightening of credit conditions as well as the limited solvency of households, measures which have had a strong impact on demand for housing.

It is the city of Lyon which comes in second place among the cities where the decline in real estate prices has been the most significant, the average price per square meter is now €4,798/m2 (i.e. a decline of -5 .9%). On the last step of the podium, Paris, with a decline of 5%, the price per square meter thus increases to €9,644/m2 on average. Bordeaux and Rennes come fourth and fifth in the ranking with a decline of 4.9% and 4.3% respectively, the average price per square meter thus increases to €4,541/m2 for Bordeaux and €3,958/m2 for Rennes. .

In the second part of this top 10 French cities where real estate prices have fallen the most in 2023, we find Toulouse with a decline of 3.5% (average price per square meter €3,555/m2), Marseille with a drop of 2.8% (price per square meter €3,571/m2 on average), Strasbourg with a drop of 2.5% (average price per square meter €3,879/m2) and finally Lille and Nice with a decrease which is respectively 0.9% and 0.4% (average price per square meter €3,658/m2 for Lille and €5,046/m2 for Nice).

The reasons for the decline in the French real estate market

In 2023, real estate sales fell by almost a quarter compared to the previous year. In fact, sales fell below the threshold of 900,000 sales concluded. In addition, prices also fell by 1.8% in France, this has not happened since 2013 as indicated by certain real estate valuation specialists.

Several factors played a crucial role in the decline of the real estate market, including the strengthening of conditions for granting real estate loans, the limited solvency of households, and even the economic and political situation in the country. Indeed, all these parameters have held back some potential buyers. On the sellers’ side, they were forced to lower their prices to adapt to those of the market.

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