French Property Bounce Back: Where Is Leading the Way?
-
Loading... - Hannele Kivi
- 07 Feb 2025
- 38 Views
- 0 Like
- 0 Comment
The French property market is experiencing a notable resurgence, particularly in the rural sector, as estate agents report increased interest from buyers. With improved purchasing power and a willingness among sellers to accept lower prices, the market is showing signs of recovery, especially in rural areas where prices have remained more stable compared to larger cities.
Key Trends in the Market
1. Improved Purchasing Power and Mortgage Accessibility
Buyers are now finding it easier to secure mortgages, as banks have reduced interest rates and become more flexible regarding deposit requirements. This shift has contributed to a more favorable environment for potential homeowners. Charles Marinakis, president of the Century 21 network, emphasizes that the decline in prices for non-newbuild properties is expected to stabilize by 2025, with a projected rise of 2-3% across France.
2. Seller Realism and Market Dynamics
Sellers who are realistic about pricing are seeing their properties sell, according to Joanna Leggett of Leggett Immobilier. While some sellers may benefit from waiting for a potential price increase, those who are motivated to sell now are finding success. The market has recorded an average price drop of 3.8% for houses and 0.7% for flats in 2024, which has helped stimulate demand.
3. Increased Demand and Regional Variations
Overall, there has been a 5% increase in buyer demand in the last quarter of 2024 compared to the previous year. However, the Paris and Île-de-France regions have been slower to recover compared to other areas. Rural properties are leading the way, with prices rising by 2.1% in these regions, while some cities like Rennes, Lyon, Nice, Strasbourg, and Lille are also experiencing price increases.
Experts predict a clear upward trend in the property market moving forward. Thomas Lefebvre from SeLoger and Meilleurs Agents anticipates a significant recovery, with Century 21 estimating up to 850,000 sales in 2025, which, while below the peak of 1.2 million in 2021, is still considered reasonable historically.
4. International Buyers and Lifestyle Preferences
There has been a sharp increase in sales from both French and international buyers, particularly in the last quarter of 2024. International buyers are less price-sensitive and are primarily interested in properties that offer a ready-to-move-in experience, reflecting a desire for the French lifestyle rather than renovation projects.
5. Positive Signs from Financial Institutions
Mortgage broker Meilleur-taux reports that buyers at the end of 2024 could afford homes that are 6m² larger than those purchased at the end of 2023, based on an average interest rate of 3.35%. With the European Central Bank lowering its main interest rate to 3%, further cuts are anticipated, which could enhance buyer purchasing power.
The French property market is on the rebound, particularly in rural areas, driven by improved buyer conditions, realistic seller pricing, and a growing interest from both domestic and international buyers. As the market stabilizes and interest rates potentially decrease further, 2025 is shaping up to be a promising year for property transactions in France.
