Quarterly property prices in France ‘fall for first time since 2015’

They dropped by 0.2% in the first three months of this year, latest figures show

House prices are expected to continue to fall throughout 2023
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House prices in France have fallen across the board in the first quarter of 2023, according to provisional data from the public statistics agency INSEE (Institut national de la statistique et des études économiques).

Using a mix of official notaire data - including national preliminary data from the Notaires de France group - the body has recorded a drop in property prices for the first time since the second quarter of 2015.

This is largely being driven by a fall in prices in Paris and the surrounding region, with areas outside of the Île-de-France seeing tiny overall increases.

This information is the best indication of trends in the used property market until the full data from Notaires de France is released.

It usually comes around six months after the quarter has finished, and you can find our report on the last full set of notaire figures – for the final quarter of 2022 – here.

First overall fall since 2015

In the most recent complete notaire data available (for the final quarter of 2022), the quarterly increase in house prices across France was only 0.2%.

The first quarter of 2023 however sees a fall of 0.2% – the first time house prices have fallen quarterly since 2015.

On top of this, the year-on-year change in house prices will see a sharp decline between the final quarter of 2022 – where it was +4.8% according to INSEE – and the first quarter of 2023, which will register only a 2.7% rise.

The fall in values is slightly more pronounced for flats (+2.2%) than houses (+3.1%), but this is largely due to the effects of Paris on the overall scene, as this trend is switched for areas outside of the capital.

On the other hand, the fall in house prices in the last three months was slightly bigger in houses (0.3%) than flats (0.1%).

Despite the potentially grim reading, the fall in property prices is more of a return to normal activity.

The effects of Covid-19 on the property market saw sharp increases in both these areas, with the ‘fall’ more realistically returning prices to where they would be expected to be if Covid had not happened.

Read also: Falling prices, fewer sales: what latest French notaire data shows

Paris flats driving price drop

The data released by INSEE focuses in particular on Paris and the wider Île-de-France capital region.

It shows that for the second consecutive quarter, property prices in Île-de-France fell with a quarter-on-quarter drop of 1.1% after falling at the end of 2022 by 0.5%.

Apartments in the region are seeing the brunt of price drops – in Paris proper, they fell for the third consecutive quarter (a quarterly drop of 1.2%), and have fallen by 2% year-on-year.

In the wider region, flat prices fell by 1.2% between the last quarter of 2022 and the first of 2023.

House prices in the region are not affected as much, however, and saw a small year-on-year rise of only 0.9%.

Outside of the region, property prices are mostly stative, with the first quarter of 2023 seeing a 0.1% overall rise.

Year-on-year flat prices have risen stronger than house prices (4.7% compared to 3.5%) outside of the capital.

This is tempered, however, by heavy fluctuations depending on city and region – such specific information has not yet been released, but was evident in the last complete notaire data for the final quarter of 2022.

Fall in transactions but an increase in housing stock sold

The preliminary data for March 2023 also shows house sales of 1,069,000 within a twelve-month period, not quite falling under the one-million threshold, as expected.

These sales represent around 2.8% of the entire housing stock in the country – despite the falling number of sales, this is higher than the 2.6% of the housing stock sold in the mid-2000s, previously considered a high amount.

This may be due to the falling number of homes being built in France – the housing stock only increases by around 1% per year, according to INSEE, and there have been numerous reports of France’s new property market grinding to a halt.

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