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After two years of marked decline, the real estate market seems to be reaching a turning point. According to Charles Marinakis, president of Century 21 France, the price correction is nearing its end, opening the way for stabilization, or even a slight increase during the year 2025. In Paris, the price per square meter has dropped by nearly 10 % in two years, a similar decline observed throughout Île-de-France. This correction, exacerbated by rising interest rates, has allowed sales to gradually restart. However, the evolution of the market will depend on several factors, including the continuation of the drop in credit rates and the ability of sellers to adjust their prices to the new expectations of buyers.
A brutal but necessary correction
The real estate crisis that began in 2022 has profoundly transformed the market, with a widespread drop in prices over two years. This correction has been particularly marked in major urban areas, where prices had reached record levels after the health crisis. In Paris, the average price per square meter has fallen by 9.9 %, settling at €9,321 at the end of 2024. The Île-de-France region has followed a similar trajectory, with a decline of over 9 % in apartments and houses.
This decline can largely be explained by the post-Covid price surge, particularly for single-family homes, whose demand had soared following the lockdowns. As interest rates climbed, access to credit became stricter, forcing buyers to reassess their budgets and sellers to adjust their expectations.
Although this correction has weighed on the market, it has also allowed for a gradual restart of transactions. In 2024, real estate sales rebounded by 3 % in Paris, after a drop of 13 % in 2023. Nationwide, 780,000 transactions were recorded for the year, a decline of only 10 % from 2023, whereas the previous year showed a much more brutal drop of 25 %. This evolution suggests that the real estate market is approaching an equilibrium point, marking the end of the retrenchment phase.
2025 : a fragile stabilization
After two years of decline, the real estate market seems to be embarking on a new phase. While 2024 marked a slowdown in the drop of prices, 2025 could be the year of rebound. For Charles Marinakis, president of Century 21 France, the prices of existing real estate should register an increase of 2 to 3 % nationwide. This recovery would be explained by improved borrowing conditions and the gradual return of buyer confidence.
Indeed, credit rates play a key role in this dynamic. Currently close to 3.30 % for 20 years, they could fall between 2.75 % and 3.25 %, thus restoring purchasing power to buyers. Furthermore, with a more accessible borrowing cost, transactions could start to rise again. Century 21 is banking on 850,000 sales in 2025, a notable increase compared to the previous year, where 780,000 transactions were recorded.
However, this recovery remains fragile and largely depends on sellers’ behavior. If they increase their prices too quickly, the market risks getting stuck again. “This increase should not exceed 3 %, otherwise the market will freeze,” warns Charles Marinakis, who urges professionals to regulate sellers’ expectations.
Another key factor lies in households’ borrowing capacity. Despite falling rates, purchasing power remains under pressure, particularly due to the still high level of prices and banks’ requirements regarding personal contributions. If household incomes do not keep pace with rising prices, demand could stagnate, thereby preventing a sustainable recovery of the market.
The real estate market seems to be regaining a certain balance, but uncertainty remains regarding the solidity of this recovery. Thus, the drop in credit rates could stimulate demand, but a too rapid increase in prices could undermine these efforts and make homeownership more difficult. The year 2025 will thus be decisive. If inflation remains controlled and borrowing conditions continue to improve, transactions could start to rise again. Conversely, excessive price increases, beyond the estimated 3 %, could cool buyers off and freeze the market once more. The coming months will be crucial in assessing whether this rebound marks a genuine change or just a respite before a new phase of stagnation.
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Diplômé de Sciences Po Toulouse et titulaire d’une certification consultant blockchain délivrée par Alyra, j’ai rejoint l’aventure Cointribune en 2019.
Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l’économie, j’ai pris l’engagement de sensibiliser et d’informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu’elle offre. Je m’efforce chaque jour de fournir une analyse objective de l’actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
