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2024: A Pivotal Year for the French Property Market

The year 2024 has significantly reshaped the French property market, characterised by falling prices, a decline in transactions, and tighter financing conditions. Yet behind these figures lie intriguing dynamics and opportunities to watch.

 

With 780,000 sales in the existing property market recorded over the 12 months to the end of September 2024, the market experienced a noticeable contraction. Prices followed suit, dropping by an average of 3.9% year-on-year for houses and flats in mainland France. Major cities like Bordeaux (-8.6%) and Lyon (-8.1%) were hit particularly hard, while other regions fared better. Following a sharp rise, mortgage rates eased slightly to 3.62% in August 2024. However, access to credit remains challenging, particularly for first-time buyers. Paradoxically, energy-inefficient properties have gained appeal due to their more affordable prices, despite the regulatory constraints surrounding their renovation. Experts anticipate a gradual recovery in transactions if financing conditions loosen. However, buy-to-let investments remain weakened by falling returns and legislative uncertainties.

A Global Market in Contrast

On the international stage, property markets displayed varying dynamics in 2024. The Americas recorded a 5% increase in transactions, whereas Europe, the Middle East, and Africa (EMEA) saw just 1% growth. Nevertheless, the reduction in central bank rates, particularly in the eurozone, has restored investor confidence, with a global compound annual growth rate (CAGR) of 6.07%.

Luxury Property: A Class of Its Own …

In 2024, the French luxury property market stood out for its resilience. While the mainstream market faltered (-2.1% for houses, -3% for flats), the high-end segment held firm, with prices for luxury houses up by 2.3% and high-end flats rising by 1.1%.

Paris remains a beacon for buyers seeking exceptional properties. In the 6th, 7th, 8th, and 16th arrondissements, the median price reaches €4.2 million, with some square metres fetching as much as €35,000. The capital continues to embody timeless luxury. On the French Riviera, the market shines just as brightly. A house near the coastline averages €2.2 million, while Saint-Tropez sees median prices soaring to €6.7 million. The Mediterranean allure remains irresistible.

Buyers are now favouring "turnkey" properties: 60% prioritise ready-to-live-in homes, with outdoor spaces, gardens, and high-end amenities becoming post-pandemic essentials. International investors, particularly from Asia and the Middle East, are driving this trend in pursuit of perfection.

Despite rising interest rates, the luxury segment appears immune: 54% of buyers report being unaffected. The desire to acquire rare properties often outweighs financial constraints.

In conclusion

The year 2024 marked a turning point for the French property market, with price adjustments and a shift in buyer priorities. The outlook for 2025 is encouraging, but will depend largely on changes in economic and financial conditions. One thing is certain: the market will continue to evolve, offering opportunities for those who know how to adapt. For its part, the luxury property market in France has confirmed its strength and elegance. Resilient in the face of economic ups and downs, it continues to evolve to meet buyers' expectations. The outlook for 2025 is promising, with steady demand and limited supply, so the market looks set to be stable and attractive. France's charm - with its heritage, quality of life and legal certainty - remains a major asset. In addition, new environmental standards could add value to renovated properties, offering a new opportunity for owners.

 

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