Positive developments in real estate for buyers have emerged in 2024, marked by a decline in credit rates to an average of 3.40% and falling property prices in many French cities. This has significantly enhanced purchasing power, allowing households to afford larger apartments, particularly in cities like Saint-Etienne and Le Mans. However, areas with high property prices, such as Paris and Bourges, have seen more modest improvements or stagnation in purchasing power due to rising costs.
Positive Trends for Real Estate Buyers
The outlook for real estate buyers is finally looking up. Since the start of 2024, credit rates have decreased by nearly one percentage point, reaching an average of 3.40% for 20-year loans by November, according to the broker VousFinancer. This decline has enabled households to boost their borrowing capacity by several thousand euros within just a few months. Concurrently, real estate prices have dropped in many major cities across France. In this favorable environment for borrowers, let’s explore how the average real estate purchasing power of households has evolved in the 50 largest cities in France as of December 2024.
Real Estate Purchasing Power Insights
This metric estimates the size of an apartment that a household can afford in various municipalities with a monthly payment of €1,000 and a down payment of 10% of the property’s price. This is based on a 20-year loan at an average interest rate of 3.40%. The evaluations were conducted by our partner Se Loger, using the average apartment prices as of December 1, 2024, in the fifty largest cities nationwide.
One notable example of this trend is Saint-Etienne, where buyers have experienced a dramatic increase in their real estate purchasing power, gaining an impressive 11 square meters since early 2024. This equates to roughly an additional room! It’s important to highlight that the average apartment prices in the Loire capital are among the most affordable in major French cities, sitting at around €1,281 per square meter in December, with a further decrease of 0.8% noted that month. In Le Mans, households can now purchase an apartment with an area of 100 square meters for a monthly payment of €1,000, which marks a gain of 17 square meters.
Conversely, the enhancements in real estate purchasing power are more modest in cities where property prices remain elevated. For instance, in Paris, a household can buy an average studio measuring 19 square meters with a monthly payment of €1,000, reflecting an increase of two additional square meters since the beginning of 2024. Additionally, Bourges (Cher) stands out as the only major French city where the average real estate purchasing power has stagnated since January 2024. This stagnation can be attributed to a significant rise in apartment prices, which have increased by 6.5% on average, driven by a robust market recovery in the city since last spring, effectively counterbalancing the benefits of lower mortgage credit rates.