French Real Estate Market Undergoes Transformation

Feb 14 | 4 minutes read
french real estate market

Are you looking to buy or sell a property in France? Now is the time to act! The 2022 real estate market in France is showing no signs of slowing down, with transaction volume forecasted to hit a historic high of 1.1 million sales by year-end.


Despite some concerns about the rate of sale cancellations, which are typically between 2% and 3%, experts predict that the market will remain strong throughout the year, with the likelihood of falling below one million transactions being very slim. This means that you can be confident in your decision to buy or sell a property in France in 2022.


Furthermore, the market is also showing strong price growth, with an average increase of +5.7% over the past 12 months, and rural areas experiencing a staggering growth of +8%. Even the largest cities in France, including Paris, are seeing a modest 5% increase in prices.


So, whether you're looking to invest in a quaint countryside cottage, a chic Parisian apartment, or a luxurious villa on the French Riviera, the 2022 real estate market in France is sure to deliver. Don't miss out on this once-in-a-lifetime opportunity to be a part of one of the hottest real estate markets in years!


The French real estate market is experiencing an interesting shift, with some of the country's largest cities showing signs of slowdown while others continue to thrive. In particular, the 11 largest cities in France are seeing varied performance, with some cities experiencing positive growth while others are facing challenges.


Cities like Paris and Lyon, which were hit hard by the first confinement, are now bouncing back, with real estate markets starting to recover since 2021. Meanwhile, Lille, Nantes, and Bordeaux are experiencing slower but still positive growth compared to recent years.


On the other hand, Marseille and Strasbourg are the clear winners of the real estate market in the last two years, with significant increases of close to +9%. These cities are proving to be lucrative for both buyers and sellers, with strong demand and rising prices.


France real estate market


Whether you're looking to buy or sell a property in France, it's important to pay attention to the trends in each individual city to make informed decisions. While some cities may be experiencing a slowdown, others are thriving and presenting excellent opportunities for investment.


Amid the COVID-19 pandemic, the real estate market has been experiencing some major changes, one of which is the strong demand for houses. Despite the slight slowdown in the market, houses remain a popular choice, causing a shortage in supply.


This is evident in the stock of advertisements for houses for sale, which has decreased by 54% in four years. Meanwhile, apartments have also seen an increase in prices, up 4.7% from last year. The recent rise in interest rates has raised concerns about its effect on demand. However, the average affordability ratio observed in France is still historically low, with 70% of major cities below the 35% threshold.


In the worst-case scenario of the interest rate reaching 4%, the affordability ratio would remain acceptable at 34%, but would be most impacted in cities such as Paris, Cannes, Antibes, Nice, and La Rochelle. The shortage of supply is exacerbated in the rural world, while urban markets such as the Top 10 and Top 50 cities see supply gradually being rebuilt. The situation of oversupply in the Paris market might not be spared from the drop in demand, causing prices to fall.


The French real estate market is likely to experience a slowdown in the next year, as per the predictions made under certain economic assumptions. While inflation is expected to remain high, the unemployment rate should stabilize below 8%, and a drop in loan offers of less than 20% is expected. However, certain risk factors such as the potential worsening of the energy crisis, an acceleration of the inflationary spiral, tensions on European sovereign debt, and a worsening of the current geopolitical situation should be closely monitored.


With these assumptions, it is predicted that the real estate market will witness a 3% increase in prices and a drop in transaction volumes, with below one million sales and around 950,000 transactions over the next 12 months, according to Thomas Lefebvre, the Scientific Director of Meilleur Agents, SeLoger (Group Aviv).

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