Paris and the Ile-de-France region are no exception. The significant fall in real estate prices, already observed in the Paris region since the fall of 2022, is now seen throughout France. According to the Notaires-INSEE index published on Thursday, February 29, existing property prices nationwide fell by 4% year-on-year at the end of 2023, whereas 6 months earlier they were still rising by 0.5%.

With a delay, the turnaround can be explained by the slump in transaction volumes that began just over two years ago. Between 2021 and 2023, the annual volume of transactions collapsed by 26% in France, from nearly 1.2 million to 870,000 sales. "Household solvency no longer allows us to see first-time buyers, and the wait-and-see attitude is now very much in evidence," said Elodie Frémont, spokesperson for the Chambre des Notaires du Grand Paris (Greater Paris Chamber of Notaries). The sharp and rapid rise in interest rates has made it much more difficult for households to borrow, while banks have been extremely cautious.

While prices fall across the board, the intensity of the drop varies from region to region. In Paris, the decline is more severe: Square meter prices stood at €9,770 in the fourth quarter of 2023, down by almost 7% in one year. "And it's not over yet," said the notaries, based on their leading indicators. According to pre-contracts, the square meter price in Paris is set to fall to €9,410 in April, a drop of 8% in one year, and even more than 13% from the November 2020 peak. "The price, in current euros, would thus be reduced to the level of summer 2018," said the Chambre des Notaires du Grand Paris.

At the end of 2023, not only were all Parisian arrondissements recording annual price declines but the decline was vigorous (greater than 5%) for 13 of them. The steepest declines were in the least expensive arrondissements on the eastern outskirts, such as the 13^th (−12%) and the 19^th (−9%), a sector that fell below the €8,000 per square meter mark.

Prices have fallen less sharply in the center and upscale neighborhoods (−3% in Paris center and the 8^th), "thanks in particular to foreign buyers, who benefit from high purchasing power and can do without a mortgage," said Olivier Clermont, notary in Paris. "This contrasts with the trends seen during the 2008 financial crisis when the most expensive arrondissements saw their prices fall the fastest," said his colleague Thierry Delesalle.

In this bearish market, a few of the capital's most sought-after neighborhoods remain the exception, in particular Notre-Dame, the most expensive, which has also seen the strongest growth in a year (+15.7% to €18,000 per square meter).

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