Baino Estates LLC: The Investor's lens on the French realty

During the second quarter of 2023, the French secondary real estate market witnessed a notable annual increase of 6.8% in property prices, as compared to the corresponding period of the previous year. This analysis, provided by Baino Estates LLC analysts, highlights a 4.5% rise in the cost of apartments and a more significant 8.4% increase in house prices.

General Market Dynamics In the Île-de-France metropolitan area, there was a modest increase of 2.2% in housing prices. The price of apartments in this region saw a slight rise of 0.7%, whereas house prices surged by 5.4%. Since the fourth quarter of 2020, the villa segment in this region has consistently shown a faster price growth trend. Contrasting this, in the historical center of Paris, apartment prices have declined by 0.8% over the year. However, in the Parisian suburbs, known as Petit Paris, prices have ascended by 1.2%, and in Greater Paris, the increase was 4.1%. The cost of a villa in Petit Paris is now 4.5% higher than last year, and in Greater Paris, it is 5.8% more expensive.

In the provinces of France, the increase in residential real estate prices has been particularly robust, with an overall annual growth of 8.6%. Apartment prices have escalated by 7.6%, and house prices by 9.0%.

Regional Markets Three significant local markets outside the capital region are Auvergne-Rhone-Alpes, Hauts-de-France, and Provence-Alpes-Côte d’Azur. These regions have experienced annual increases in secondary market real estate prices of 7.9%, 6.4%, and 8.2%, respectively. In the Auvergne-Rhone-Alpes region, apartment prices rose by 6.1% over the year, but in Lyon, the administrative center of the region, prices remained static. In Hauts-de-France and Provence-Alpes-Côte d’Azur, house prices increased by 7.4%. In Lille, the capital of Hauts-de-France, the price dynamics were similar, while in Marseille, the capital of Provence-Alpes-Côte d’Azur, there was a significant double-digit growth of 10%.

Villa prices in Auvergne-Rhone-Alpes increased by 9.4% (mirroring Lyon’s rate), in Hauts-de-France by 6.2% (5.8% in Lille), and in Provence-Alpes-Côte d’Azur by 8.9% (equivalent to Marseille’s rate).

Additionally, the report provides specific data for apartments in areas based on population size. In locales with more than 10,000 inhabitants, prices escalated by 7.3%, while in smaller towns and rural areas, the increase was 9.8%. No similar statistics were available for houses.

Despite the rising prices, Baino Estates LLC experts observe a decrease in the volume of property purchase and sale transactions in France during the second quarter. Investors, apprehensive about potential risks, believe that the French real estate market may be nearing its peak growth limit at this stage. Currently, the French real estate market predominantly attracts established investors.

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