Whether inflation, higher mortgage rates or any other factor is to blame, the story is the same. Demand for properties new and old has dropped significantly in France, prices are falling and even construction has slowed.
In the first nine months of 2023, prices contracted by 1.94% or 6.33% when adjusted for inflation after falling by 1.3% in 2022, according to data released by INSEE, France’s National Institute for Statistical and Economic Studies.
But while the capital in particular flounders – prices have been falling steadily in Paris for two years and the wider Île-de-France area is similarly affected – the south of France continues to note increasing prices for both houses and apartments.
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Year-on-year, prices in Nice rose by 7.45% from 2022 to 2023 and in Aix-en-Provence, prices were up 7.6%, according to the Observatoire Guy Hoquet. Marseille recorded similar figures, making it one of the rare large French cities to see any progression.
Demand is falling nationally
Purchasing property might be popular down south, but demand is falling almost everywhere else and by a not-insignificant amount.
According to statistics from the General Council for the Environment and Sustainable Development, existing home sales were down by 20% in the 12 months to October 2023. 2022 had recorded a fall of 5.2% after a boom of 14.7% in 2021.
It is more dire still for sales of new property, which nose-dived by 38.7% between October 2022 and October 2023.
The final volume of sales concluded in 2023 is yet to be revealed, but, according to the Observatoire Guy Hoquet, should the total fail to reach the one million mark, 2023 will have known the sharpest housing market contraction in a decade.
Construction slowing
Even activity in the residential construction sector has cooled off. The number of permits to build fell by 27.3% during the first 11 months of last year, according to INSEE, while the number of projects to get off the ground also dipped by 23.8% over the same time period.
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