Property prices in France appear to have peaked, with some experts predicting falls of up to 10 percent in some regions in 2023, though new-build prices continue to rise.
But, with interest rates rising, even discounted property prices may not be enough to tempt buyers in the short term - the number of mortgages approved in October was down 40 percent on the previous month, with the higher cost of borrowing blamed for the marked dip.
Immobiliers (real estate agents) across the country have factored in falling prices for existing properties next year as supply outstrips demand. The Fédération Nationale de l'Immobilier (FNAIM) predicts a 5 percent average decline in property prices in 2023 - with larger cities bearing the brunt of the decline after years of rocketing prices. Over the past three years, older properties have seen price rises, on average of 23 percent, according to data from national statistics provider Insee.
Rising interest rates and a fall in the number of properties under construction, however, leads property experts to believe that the cost of new-build properties in France will continue to rise in the medium term.
In the year to November, the square-metre cost of a new-build property rose 5.7 percent, according to the Laboratoire de l’immobilier. In the past three years, new-build property prices have jumped 18 percent.
The boss of the L'Adresse network of agencies predicts a drop could be as high as 10 percent. The Laforêt chain currently forecasts a more modest two or three percent fall.
In fact, prices are already falling in Paris, Lyon and Nantes, while the market in and around Bordeaux has stagnated, according to agents.
Notaires, too, have seen a drop in property purchases in 2022, and expect the market to dip to 2020 levels of about 1million sales, compared to 1.2million in 2021.
In Paris, prices are already falling down nearly 2 percent year-on-year to October, according to Fnaim - a situation unlikely to be helped by the expected 50 percent hike in property taxes.
In Lyon, Toulouse, Nantes, too, prices are dropping while they have stagnated in Bordeaux, Fnaim added.
It said that difficulties in accessing borrowing will inevitably end up forcing sellers to lower prices.
The reason - oversupply. For the first time since Covid-19, the Bien'ici property site has noted a sharp increase in supply - with an jump of 12 percent in property for sale year-on-year and, at the same time, a sharp drop in demand, with searches dropping 15 percent on average, and 29 percent in searches specifically for houses.
In Ile-de-France, sales volumes fell seven percent year-on-year to July, notaires in the region noted, as sellers try to hang on to high prices and buyers adopt a more cautious, wait-and-see approach. As a result, on-market properties have jumped eight percent.
According to Bien'ici, meanwhile, property ads are online for longer - 60.2 days on average recently, compared to 48.8 days in the middle of 2021.
Demand is down 12 percent in Centre-Val de Loire, while properties on offer rose. In Nouvelle Aquitaine, Bien'ici noted a 23 percent increase in the number of properties for sale, but also a 10 percent fall in searches.
Prices are falling, too, in a number of Brittany departments, but falls - Notaires de Bretagne has said - are mainly confined to larger urban areas. Rural Brittany is currently unaffected by the downturn, notaire Vincent Lemée told Ouest France.
In Occitanie, however, prices are continuing to rise, for now, notably in the Aude around Carcassonne, according to notaires. In general in the south-western region, the price of older, established houses rose nearly five percent on average.
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