French Property Market Report 2023 and Trends for 2024
Originally posted on & updated on 29th October, 2024
As the end-of-year celebrations commence and we prepare to say goodbye to 2023, we review the French Property Market Report for the past twelve months and explore real estate trends and opportunities for 2024.
About the Real Estate Market in France
The property market in France is currently going through a challenging period, reflecting the ongoing global challenges. At My-French-House.com, we remain confident in the market’s resilience as positive signals are emerging for this coming year, particularly as we’re hearing exciting news for British buyers post-Brexit.
Starting 2024 with a Positive Outlook
Since 2022, the housing market has slowed significantly. The almost quadrupling of interest rates in eighteen months has triggered a downward price cycle, but credit rates should start stabilising in the first quarter of 2024.
The French government is rolling out financial measures to support families and first-time buyers by softening some of the banks’ lending criteria. These measures, combined with an expected reduction in interest rates early in the new year, will provide the real estate industry and French buyers with a much-needed injection that the building sector had long lobbied for.
Automatic Visa for British Second-Home Owners?
At the time of writing this article, the French parliament had passed a new immigration law granting an ‘automatic’ visa to British non-residents who own a second home in France. Some French politicians are pushing for an easier process for British property owners to stay longer in France.
Senator Martine Berthet proposed an amendment to extend the 90-day limit and highlighted the contributions of UK residents to local communities. On December 19th, 2023, the Senate and National Assembly in Paris voted in favor of granting long-stay visas to British property owners as a response to the challenges they face since Brexit. If approved, the amendment would allow British property owners to spend as much of the year as they wish in their French property without any time spent there counting towards the 90-day limit in the rest of the Schengen Area.
The year ended on an optimistic note for British buyers, however the latest news from 25th January 2024 have damped any progress on this Brexit related issue for the foreseeable future. The French Conseil Constitutionnel has rejected the amendment and it won’t be included in the final immigration bill after all. We’ll keep you informed at the Saga unfolds, while Spain is also watching closely for the same reasons, the large number of expats living and working there, contributing to the local economy and tourism.
Falling Sales and Prices: An Opportunity Market
The year 2023 will likely end with a record drop in yearly sales (approx. -21% to 875,000 sales) and a drop in property prices. With the transaction market “on hold”, the shortage of properties for sale in France is now accompanied by a lack of properties to rent, creating opportunities for buyers and investors. Some rental agencies in Paris no longer list their new offers online as they can generate hundreds of enquiries in a single day.
French Property prices, which have been increasing steadily since 2015, are beginning to fall across the country and are more pronounced in the Ile-de-France region. Medium-sized towns and rural areas are more resilient, while property prices continue to rise in Corsica and the Provence Alps Cote d’Azur region.
French Real Estate 2023 in Numbers
Based on the Notaires-Insee index (November 2023), it has been reported resale property prices have decreased by 1.8% year-on-year in the third quarter of 2023. This drop was caused by a decline in house prices, which fell by 1.0% (previously 1.3%) while apartment prices continued to rise at a slower rate of 0.5% (previously 2.8%) for the same period.
The decline in the number of transactions has accelerated in 2023, reaching 908,000 sales (-20 % year-on-year) over twelve rolling months to the end of October. It brings housing prices in its wake, which have declined by 0.7% from January 1 to December 1, 2023, after several years of steady increase.
Real Estate Prices in Paris
As in Paris, most French regions and towns have seen a drop in property and real estate value. Over one year, property prices in the capital city fell by 5.3%, as did prices in eight out of the ten largest cities in France. The exceptions were Nice and Montpellier in Occitanie.
It is estimated that Paris prices will fall below €10,000/m2, with the cumulative price drop since September 2020 being 8.6%. The price drop is also significant in the suburbs of Paris, with a 2.9% decrease.
The CAC Reaches Historic Peak
The CAC 40 index has ended the year on a high, thanks to the decline in inflation and the prospect of a drop in interest rates in the first quarter of 2024. The flagship index of the Paris Stock Exchange reached a new historic peak on Tuesday, December 12, in the morning session, crossing the 7582.47 points mark.
Since its low point in October, the CAC 40 has rebounded by over 11% and has appreciated by 16.53% since January 1. This is in sharp contrast to 2022, which saw a decline of 8.5% due to the combined effects of the war in Ukraine, soaring inflation, the energy crisis, and rising interest rates.
Inaccessible French Mortgages
Since the start of 2022, banks in France have had stricter criteria than ever for French mortgages, with buyers permitted to borrow with repayments less than 35% of their total income. This is called “taux d’usure” which is calculated before tax and considers other mortgages/loans/credit cards.
In addition, borrowing terms have been tightened and are set to a maximum of 25 years, driving some buyers to find alternative lending sources. Do you want to learn if you qualify for a French mortgage? Please fill out the enquiry form and our financial experts will contact you promptly to discuss your options.
Another Big Year for Tourism
We’ve mentioned how the last twelve months have been challenging for both buyers and sellers, waiting for the right moment and conditions. However, the interest in France remains very strong.
One of the key factors contributing to the relative stability of the French property market is the resilient demand from domestic and international buyers. The country received nearly 90 million tourists in 2018. After the Rugby World Cup, it is frantically preparing to host the Olympic and Paralympic Games, with an expected 13.5 million visitors for this unique global event. France remains one of the most famous European destinations for property investment and relocation.
Hybrid Work, Gîtes and Income from Home
In recent years, remote working arrangements have become widely accepted with many companies in France embracing hybrid work models. As a result, young professionals and families have been buying properties that offer home office spaces and access to high-speed internet. Rural areas and small towns, which offer a better work-life balance, are predicted to attract more buyers, especially income-generating properties, such as gîtes or B&B’s.
Our Plans for the Year
We continuously improve our website, sourcing properties and ‘immobiliers’ and writing more free content, tips and advice for our French blog. If you are a regular to our award-winning website, you would have noticed some of our exciting new content. We are also bringing new partners and experts on board to serve our clients from all over the world, whether for international money transfers, tax or insurance services.
We are exploring new areas of interest for buyers and investors; newly built and off-plan properties for sale in the Alps and on the French Riviera. Naturally, we continue to unearth hidden gems, fine character houses, historic châteaux and unique estates to the delight of our international clients. Additionally, our bespoke à la carte home hunting service has proved popular, particularly for Lyon and Paris, with buyers seeking a pied-a-terre that can also earn them rental income and returns.
Joyeux Nöel, A Bientôt …
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Joyeux Nöel, we wish you and your family a fabulous holiday.
Patrick JOSEPH and the team at MFH
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