Housing prices have dropped for the first time in eight years in France. Sales in Paris have seen the biggest decrease, while prices have remained fairly stable in the south of France.  

According to a report put out by France’s statistical agency INSEE ealier this week, housing prices in the first quarter of 2023 fell by -0.2%. Though only slight, this is the first time that prices have decreased since the second quarter of 2015.  

The Paris region, including its suburbs, took the biggest hit, with -1.1% drop. Nationwide, flat prices decreased by -0.1% and houses by -0.2%, though when broken down region-by-region, the picture is a bit more mixed.   

Locally, for example, the prices of apartments in the Provence-Alpes-Côte d’Azur (PACA) region have seen a marginal rise of 0.9% in 2023 so far, led by Marseille, which recorded a 1.9% rise. The price of houses, on the other hand, saw a -0.3% fall. 

The Hauts-de-France, France’s northernmost region, is seeing a mini-boom, with prices for flats going up by 1.4%. This is tempered, however, by prices for houses contracting by -1.2%.  

Lower prices, less transactions  

In the first quarter of 2023, the volume of sales was also on the downturn. At the end of March, the annual number of transactions over the past 12-month period was estimated at 1,069,000. It was 1,115,000 at the end of December 2022, after almost a year of consistent decreases.  

The report also said that the proportion of transactions of available dwellings was 2.8% of the total stock, and is higher than pre-pandemic numbers, and even exceeded the high levels observed in the early 2000s, when it sat at 2.6%. 

A different world 

Buyer behaviours since the health crisis are thought to have changed the market. Real estate is adapting itself to new banking conditions, notably with higher interest rates, as well as economic trends in the form of high inflation and unpredictable energy prices.  

Despite the uncertainties, the general feeling in the sector is that prices are stable, and that a repeat of anything akin to the 2008 subprime crisis is not likely. 

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