With falling property prices, the wealth of the French decreased last year for the second consecutive year, according to a study of the INSEE and the Banque de France published on Wednesday, December 11. At the end of 2023, the wealth of French families stood at 14,567 billion euros, or 0.9% less than at the end of 2022. Already in 2022, it had decreased very slightly (- 0.1%), after eight years of uninterrupted growth.
The increase in wealth is mainly due to the fall in real estate prices: the value of assets held by households decreased by 4.7%. This significant decline was partly offset by the increase in its net financial assets of 8.3%, driven by the increase in key rates by the European Central Bank in 2023 which raised the value of its financial assets . It is this increase in key rates that has increased the cost of real estate loans, and has caused demand and then real estate prices to fall by 2022.
Corporate wealth has declined much more than that of households in 2023, losing 10% of its value in a year for non-financial companies. Responsible for this are, on the one hand, the fall in land prices, and on the other hand, the increase in the financial liabilities of these companies. Public administration assets decreased even more significantly (-27.5%), for identical reasons. The latter, however, remains higher than its 2021 level, because it had increased significantly in 2022.
Adding all these assets, the general national wealth has decreased in 2023 (-4.2%), a first since 2014. Real estate prices will continue to fall during the first two quarters of 2024 to begin to stabilize in the third, according to the Notary-Insee. benchmark published at the end of November.
The decision at the beginning of June by the European Central Bank to start reducing its rates after the very strong slowdown in inflation was considered a first factor in the recovery of the market. But buyers are still waiting and see, and the number of transactions continued to decline in the third quarter.