Prices drop in the old, an unprecedented drop since 2015

This is the first drop recorded since 2015. While inflation is strangling households and interest rates are soaring, the prices of old real estate fell by 0.2% in the 1st quarter, according to the Notaires-INSEE index. Over one year, prices increased by 2.7%, a very marked deceleration compared to the end of 2022 (4.6%), driven in particular by houses.

These continue to grow faster than apartments (+3.1% against +2.2%), as has been the case since 2020, but the gap is closing rapidly compared to previous quarters. Moreover, in the first quarter of 2023 alone, the trend was reversed: the price of houses fell more than that of apartments (-0.3% against -0.1%).

Prices fall in Ile-de-France

In a context of inflation, real estate suffers from the rapid rise in interest rates, which heavily penalizes households having to borrow to acquire a property. Prices over one year are now down in Ile-de-France (-0.6%), while they are still rising in the provinces (+3.9%) despite a pronounced deceleration. The number of transactions over 12 months is estimated at 1.07 million, down sharply from the previous quarter (1.12 million) but still well above the historical average.

“The real estate market seems to have entered a new era, with increasingly strong interest rates”, noted at a press conference the president of the statistical commission of Notaries of Greater Paris, Elodie Frémont. “It is therefore a real shock that is suffered in this quarter”, underlines Me Frémont, noting a fall in transactions over 12 months, which fell from 1.12 million at the end of 2022 to 1.07 million in the first quarter of 2023. A figure which nevertheless remains higher than the historical average.

source site