Housing: further decline in activity and confirmation of weakening prices

[December 2023] BPCE economists provide an overview of the housing market situation at the end of the 4th quarter of 2023.

In 2023, the general environment inspired a growing wait-and-see attitude on the part of the French towards investing in property: 53% of French people think that now is a rather unfavorable time to buy a home, compared with 44% a year ago. This attitude has been reinforced in recent months by growing expectations that real-estate prices will decline – expectations that were confirmed in the third quarter of the year for both existing and new-build properties.

Intentions to sell remain high but sales are increasingly marked by uncertainty: more sellers are considering revising their initial price expectations downwards and they are concerned that it will take them longer to sell their properties than they had initially hoped (Savings & Investment Barometer survey, BPCE/Audirep, November 2023).

In a credit environment that is not expected to be much better in 2024 than in 2023 (interest rates remaining high although a moderate reduction is not to be excluded) and, despite French people’s continuing penchant for real estate, it seems likely that market activities will continue to decline (potentially resulting in a total of 780,000 transactions in 2024) and that the downturn in prices that began in 2023 will be confirmed (the downturn could become more pronounced and more widespread geographically, with a decline of -6% expected in 2024 following one of -3% in 2023).

In line with the national challenges posed by the ecological transition, the public authorities have redirected their efforts towards housing renovation, directing aid less towards new-build housing (housing starts could therefore fail to reach the threshold of 290,000 units in 2024, as in 2023).) and more towards helping households to renovate their homes (increased budget commitments for the MaPrimeRénov subsidy program, the Eco-PTZ interest-free loans, etc.) However, achieving the extremely ambitious housing renovation targets still seems difficult at the current pace of execution: approximately 70,000 major renovations completed in 2022, fewer than 90,000 estimated in 2023 for a target of 200,000 per year as of 2024. The BPCE L’Observatoire survey shows that the proportion of French people planning to undertake energy-efficient renovation work within the next five years has remained unchanged over the past two years. French households are struggling to pass a milestone in terms of their awareness of the need to carry out this work and their motivation to do so.

To find out more (in French only)

To find out more (in French only)

Conjoncture Logement – décembre 2023


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