Associated Notary in Paris
Angle Droit Notaires


Having once aspired to a career in journalism and still maintaining a close connection with the profession, I will attempt to discuss the current real estate crisis with all the seriousness of a notary.

A catchy title is essential! However, it’s not about writing extravagance, even if we partly escape it by posing a simple question. Is the answer obvious in a world where uncertainties multiply in the age of immediacy?

A crisis, yes, but also in real estate

For decades, it seems we have been perpetually in crisis. An illustration of this is the latest film by Olivier Nakache and Eric Toledano “Une année difficile” whose credits repeat these three words in televised speeches ranging from Georges Pompidou to Emmanuel Macron.
The notary profession is, of course, one of the cogs in the real estate market, but it also regularly publishes an index to monitor this market, which has received the INSEE label.
The profession, like all actors in society, goes through various crises, whether it be the financial crisis of 2008 or the pandemic of 2020. We have to go back to the years 91-97 to encounter the last so-called real estate crisis, known as “the great crisis”, the American “subprime” crisis of 2008 having had its effects on the real estate market in France instantly over a relatively short period.

Since the end of 2022, we have gradually entered a real estate crisis. Which has intensified since the second half of 2023. It concerns both individuals and professionals, developers, property dealers, institutional investors… It follows, as almost always, a period of overheating where the actors, carried away by the movement, forget the lessons of the past. But could it be otherwise?

We have come out of a period where access to credit was easy and under extremely favorable conditions (rates below 1%, remember). At the same time, and quite logically, inflation was at a rarely reached low level. The external trigger was the war in Ukraine and its repercussions on raw materials as well as on monetary policy.
In addition to rates above 4%, banks have gradually turned off the tap, sometimes discouraging even the most motivated, with the granting of credit falling by about 50%.

The latest figures from the notaries of Greater Paris

The last annual congress of notaries, held in Deauville last September, had housing as its theme. Being a force of proposal, this congress could not have come at a better time when the government was looking, and probably still is, for solutions to revive this sector, which has been severely shaken in a few months.

At the end of November, the Paris Chamber of Notaries shared the latest trends:

“The shock intensifies with a decline in sales volumes of more than a third and an amplification of price drops. In Ile-de-France, in the 3rd quarter of 2023, the drop in the number of sales of old housing accelerates and reaches 34% in one year, after a decrease of 25% in the 2nd quarter and 17% in the 1st quarter, compared to the same periods in 2022. The level of activity is now a quarter lower than the last ten years.”

In total, 41,000 sales were lost in the Ile-de-France region in one year. The correction on prices is intensifying.

“The general decline in activity continues to weigh on prices. In the 3rd quarter of 2023, prices per m2 (€10,090) fell by 5.3% in Paris in one year. The movement would then continue, and a price of €9,760 is expected in January 2024 (-6.3% in one year) according to advanced indicators on pre-contracts. Compared to the high point recorded in November 2020 (€10,860), the price has dropped by €1,100 and 10%. This would ultimately result in an annual drop in apartment prices of nearly 8% in January 2024.”

“And you, Maître, how do you see the future of this market?”

Like real estate agents, notaries are rightly confronted with this nagging question. What is certain is that the crisis is hitting the entire sector hard, the entire chain, from the builder to the construction company. The notary profession, which has seen the number of notaries increase since the reform of 2017, its regulated tariff decrease, is experiencing strong shocks like all players in the sector. A recent article in the journal Les Echos reported significant difficulties encountered by some offices.

It is true that some positive signs appeared at the end of the year: the stabilization, or even a beginning of a decrease in inflation as well as announcements by major banks expressing their willingness to open credit again and win customers. However, the international context is very unstable. Purchasing power is the primary concern of the French, and the economic constraints of the ecological transition have not yet finished producing their effects on monetary policies.

Moreover, the real estate sector, like many others, is in perpetual evolution. The sale of real estate by individuals tends to get a little closer to that of professionals in terms of documentation and verifications that are made. The movement is probably not over. It is symptomatic with the “energy sieves”.

The price per square meter by neighborhood in Paris is already a relative indicator. But it will be more and more so because each property is increasingly appreciated in view of its intrinsic qualities. Energy performance diagnostics, multi-year work plans, co-ownership management are just a few examples of what is today or will be scrutinized closely.

Ultimately, who knows how to answer the question about future market trends?

Apparently, no real recovery before September 2024, at best.
The most expert are always cautious and pronounce themselves on the months to come. In a world that knows a multiplication, often distressing for many, of uncertainties at the same time as the reign of immediacy, it is quite complicated to have a vision of the future and to make predictions.

However, this leaves the door open to good surprises!

 Sources : Notaires du Grand PARIS

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