As of Fall 2024, the Paris real estate market is experiencing a notable downturn, following several years of high prices and robust demand. A combination of economic factors, including inflation, rising interest rates, and stricter mortgage lending conditions, has contributed to a cooling of the market, which is expected to continue into 2025.
Price Trends and Market Dynamics
In 2023, Paris saw its first significant decline in real estate prices since 2015, with prices dropping by approximately 5% in the Île-de-France region, which includes Paris. This trend has persisted into 2024, with further decreases expected. The overall slowdown is particularly pronounced in the volume of transactions, which fell by 20% in 2023, reaching the lowest levels seen in seven years. Many sellers are delaying listing their properties, contributing to fewer sales (Paris Property Group) (Bluesky Finance).
Despite this, the luxury and premium real estate segments in central and highly desirable neighborhoods like the 6th, 7th and 8th arrondissements have remained relatively resilient. These areas continue to attract international buyers, partially buoyed by the visibility and infrastructure improvements associated with the 2024 Paris Olympics (Engel & Völkers).
Impact of Legislation
A significant factor impacting the Paris market is the French Climate and Resilience Law, which targets properties with poor energy efficiency, known as « thermal strainers. » By 2025, properties with a « G » energy rating will be banned from the long term rental market, followed by restrictions on « F » and « E » rated properties. This has led to increased pressure on property owners to renovate, which is affecting the supply and potentially pushing some properties off the market altogether. While this could depress prices in the short term, it also presents opportunities for investors willing to renovate( ChasseurImmobilierParis).
Outlook
Looking ahead, the Paris market is expected to stabilize somewhat, particularly as mortgage rates begin to drop. However, experts predict that any significant recovery may not occur until 2025. In the meantime, this period of lower prices and reduced competition could offer opportunities for buyers, especially those looking for long-term investments(Global Property Guide) (Bluesky Finance).
For those considering a move to Paris or investment in its real estate, understanding these dynamics is crucial. The market’s current state offers both challenges and potential opportunities, depending on your approach and timing. Metropolitan Properties Paris is glad to discuss your plans and answer your questions.
