Seven property trends highlighted by latest French notaire data
Every three months, Notaires de France publishes a detailed report on the real estate market in France, highlighting trends and other issues.
We look at the latest data relating to the third quarter of 2022 and summarize seven key takeaways.
The prices for non-newly built houses have risen across the board
Price increases for non-new build homes across France have been sharp, with all areas showing increases and some regions showing exceptional growth.
The largest increases were in Corse-du-Sud (25%), but also in smaller cities in mainland France such as Montauban (10.7%), Amiens (12.8%) and Brest (12.3%). .
House price growth was lowest in Normandy, with the country’s two smallest increases in Rouen (0.6%) and Caen (0.7%).
Read more: MAP: See where house prices have risen the most in France
Apartment prices in Paris are falling, cities are only rising slightly
Housing prices also rose in all areas except one.
Paris saw prices fall by 1.2% to €10,660/m². However, this is still by far the highest price.
Lyon follows in second place, where the median price for an apartment is €5,190 per m².
Growth in other major cities was also significantly lower than in the rest of the country; Nantes (1.2%), Bordeaux (1.3%), Lyon (1.5%) and Lille (0.1%) recorded the four lowest price increases in France.
More price negotiations because of energy prices
Price negotiations when buying a property, which are already expected to rise slightly beyond 2022, are being driven further by the cost of energy prices as a home’s energy efficiency is now seen as more important.
According to Philippe Buyens, managing director of the national real estate agency Capifrance, price negotiations of around 6% are to be expected this year.
The price increase for older houses is also lower than for newer ones due to the poor energy efficiency of these buildings.
The impact of Covid-19 on the market continues to decrease
The real estate market is slowly beginning to recalibrate after being heavily impacted by Covid-19 in 2020 and 2021, resulting in a record number of home sales.
While sales volume is still strong, it is returning to more sustainable levels after a record-breaking 1,213,000 homes sold in the 12-month period August 2020-August 2021, an increase of 23% over the previous 12 months.
Sales for the 12-month period from August 2021 to August 2022 were 1,116,000, down 6% from a year earlier
However, this volume is still above pre-Covid levels but the decline is expected to continue and return to pre-Covid levels in the coming months.
Also read: French real estate market: What notaries and experts expect for 2023
Fewer people are leaving the Ile-de-France
In 2021, the largest percentage of homebuyers in almost all departments were people from Ile-de-France, but this number has now stabilized across the country.
Most departments are now seeing a ‘stable’ number of buyers from Ile-de-France.
Some departments, particularly around the Ile-de-France, are even seeing a decrease in the share of buyers from the capital region.
The decline in these shoppers may reflect the end of a Covid-19 lifestyle that has seen many people leave the region due to the lockdown, the ability to work from home and health concerns.
It’s getting harder and harder for first-time buyers
According to the Banque de France, a higher percentage of loan applications from first-time buyers have been rejected.
However, a usury tax change in February 2023 is expected to mitigate this somewhat and make banks more willing to lend to those entering the housing market.
The amount of new home loans decreased slightly in November 2022, but the interest rate was higher and was expected to reach 2.04% in December 2022 (data for this month are not yet compiled).
Gloomy prospects for new buildings
While the data focuses on non-new homes, it can identify trends across the real estate market.
Notaries say the increase in raw materials used to build new homes stands alongside the restrictive Zero Artificialization Cute Policies – restricting building on Naturland throughout France – are leading the new construction market to a “dead end”.
They also cite the reduced appeal of the Pinel program — which cuts income taxes for those who bought new homes — as another key factor.
The number of new home sales August 2021 – August 2022 decreased by almost 10% compared to the 12 months of the previous year.
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