Average monthly property prices in France have fallen after “several years of rises”, according to a federation of French estate agents.
They dropped 0.3% in April, compared to a month earlier, said La Fédération Nationale de l’Immobilier (FNAIM).
Almost all sectors of the market have been affected by the drop, except houses in tourist hotspots and the second-home market.
Loïc Cantin, FNAIM president, warned France is heading “towards a market… which will exclude the greatest number from access to property”.
‘The period of price increases is over’
A combination of factors – more expensive raw materials stunting construction, inflation levels hitting households, and ecological laws limiting buy-to-let property owners – have combined to decrease property sales, which in turn has reduced property values.
“Readjustment [of the housing market] is inevitable, mechanical, and we cannot escape it. And it is a cycle that will take time,” Mr Cantin told La Depeche.
Inflation is a factor in particular that is preventing first-time buyers from entering the market – FNAIM predicts the increase in inflation levels has prevented around 20% of potential buyers from being able to purchase property if they wanted to.
A drop in demand
Notaire data on house sales released earlier this year showed a further decrease in the sales of logements anciens (essentially, non-new-build houses), but the FNAIM report includes the new build market as well and shows there are problems across all aspects of the market.
In 2022, around 1,109 000 properties were sold in France, but FNAIM predicts this will fall to around 950,000 in 2023.
Despite Paris bucking the trend and seeing an increase in the number of properties sold, many other departments in France saw property sales drop.
Brittany, Normandy, and the wider Île-de-France regions are amongst the most affected, seeing drops of between 12% and 17%.
Overall, tourist hotspots and areas with high second-home ownership, however, are less affected by the changes.
Annual property prices on the rise overall
It is important to remember that this decrease is only on a monthly basis and that yearly trends (taking into account all data from the last 12 months) still show a rise in house prices across France, up 4.5% compared with 6.3% at the beginning of February.
Over the year, Paris, Lyon, Nantes and Toulouse all saw falls. But they rose in Nice, Marseille and Montpellier.
But FNAIM estimates that overall demand could decrease by 10% for 2023, correlating to a 5% reduction in house prices, reports La Depeche.
“The lights are on red at all levels, it is time to legislate again to give oxygen to the market,” he said.