top cx logo
cx logo
Explorearrow down
search icon
arrow down

Why French property prices are expected to fall 5-10% in 2023

People will find it more difficult to buy and sell their homes as a dynamic property market stalls, inflation affects spending power and mortgage rates increase

French estate agents have predicted that property prices could fall by 5-10% in 2023 Pic: LeManna / Shutterstock

The average price of a property in France is expected to fall by 5-10% this year as the dynamic market of recent years slows down, inflation pushes spending power down and rising mortgage rates make it more difficult to buy.

After two boom years in 2020 and 2021, the property market is now expected to see the biggest slowdown experienced in the last 10 years. 

This time last year, mortgage interest rates were at 1% but they are now at 2.5% and could reach 3.5% by the end of the year. 

Rates have risen because mortgage lenders are borrowing from banks with higher interest because the European Central Bank has increased its rates in an attempt to calm inflation. 

This makes borrowing much more expensive for property buyers, meaning that fewer people will be able to buy and the market will lose momentum. 

While in December 2021 people could borrow €223,896 on average, by December 2022 that amount had fallen to €194,020. 

People’s buying power is also affected by a rapid increase in the price of property over recent years, especially 2020 and 2021. 

Read more: MAP: Latest house price rises in France - how has your area fared?

Read more: Seven key points from latest notaire data on French property sales

In 2019 it was possible to buy a 94m2 property in Angers with a mortgage of €200,000 over 20 years but now this sum would only buy you a 52m2 property, according to a new study by Meilleurtaux. 

The size of a property one could buy with this mortgage amount has shrunk by 24m2 in Toulon, 21m2 in Reims and 16m2 in Nice. 

On average, in France’s 20 biggest cities, the size of property available to people at this price has dropped by 13m2 over the past year and 20m2 over the past four years. 

This, paired with mortgage rates, means that fewer people are able to buy, which means that prices will fall. 

Large estate agent networks like Century and Fnaim predict prices will come down by 5-10% on average this year as properties spend longer on the market and sellers take measures to attract buyers. 

This situation may also mean that people who bought properties at a lower mortgage rate a year or so ago become reluctant to sell and take on a new house or flat at a higher mortgage rate. 

Transaction numbers are already falling

Transaction numbers have already begun to fall, according to Century 21. Over summer 2022, it states that the market shrank by 4.1% compared to the same time in 2021. 

During 2022, house sales dropped by 8.2%, while apartment sales remained more stable at -0.2%. 

Ile-de-France saw a larger contraction than the national average, at -6% in general and -10.9% for houses, as the result of a 5.5% rise in prices in the region, Century 21 said. 

Although prices will come down in 2023, it will not be a dramatic drop, as such a change would only be precipitated by a large number of new properties flooding the market, or a marked fall in demand. 

As it is, there will be fewer buyers, but also fewer sellers because of the predicted reluctance to flip properties and end up with a higher mortgage rate. 

Pressure on rental market 

France’s rental market may come under strain this year as a new law comes into force stating that properties with an energy consumption of more than 450 kWh per m2 per year can no longer be rented out long-term. 

This concerns around 90,000 properties, according to the government. 

The aim of this new rule is to encourage landlords to carry out eco-renovations on their rental properties so that they can continue to take tenants, but the rising price of raw materials and labour means that this is becoming a more expensive prospect. 

Related articles 

French property watch: Why buy in Jura and what prices to expect

French property in 2022 and 2023 predictions

Can buyers claim the interest on their French house deposit?

Resident or second-home owner in France?
Benefit from our daily digest of headlines and how-to's to help you make the most of life in France
By joining the newsletter, you agree to our Terms & Conditions and Privacy Policy
See more popular articles
The Connexion Help Guides
featured helpguide
Healthcare in France*
Featured Help Guide
- Understand the French healthcare system, how you access it and how you are reimbursed - Useful if you are new to the French healthcare system or want a more in-depth understanding - Reader question and answer section Aimed at non-French nationals living here, the guide gives an overview of what you are (and are not) covered for. There is also information for second-home owners and regular visitors.
Get news, views and information from France