Real Estate: A Fragile Yet Real Recovery
After three years of crisis, the French real estate market is showing signs of recovery. According to FNAIM, sales are starting to pick up and prices are stabilizing. However, this recovery is still tentative, hampered by household distrust, increased transfer taxes, and an uncertain political environment. Loïc Cantin, president of FNAIM, believes the market needs a significant boost in confidence to achieve lasting stability.
The Market Rebounds
The recovery is taking shape: as of the end of July 2025, the number of transactions in the existing home market has reached 910,000, reflecting an 8.7% increase year-over-year, according to cross-referenced data from IGEDD, Insee, and the notarial database. The year is expected to close with around 925,000 to 930,000 sales, significantly higher than the 850,000 recorded in 2024. After an average 5% drop in prices nationwide since 2022, the correction appears to be over. Prices are now slightly rebounding (+1% year-over-year as of September 1, 2025), aligning with the pace of inflation. However, this recovery masks significant disparities: urban outskirts continue to decline (-2.3% in the Paris suburbs, -1.1% in major regional cities), while rural areas show an increase of +1.9%, returning to pre-crisis levels. The Paris region remains the least dynamic area, with prices having stagnated over a decade.
What It Says About the Economic Situation
The macroeconomic environment favors a gradual recovery. Inflation stabilized at 0.9% year-on-year in August, down from 6% in 2023, thanks to the drop in energy prices and the eight rate cuts by the European Central Bank (ECB) since June 2024. This monetary easing has brought mortgage rates down to around 3%, their lowest level in two years, according to the CSA/Crédit Logement Observatory. Notably, these rates are now below the 10-year government bonds, reflecting the competition among banks to attract new customers and investors' mistrust in French sovereign debt. This discrepancy is reminiscent of the situation in 2012 during the eurozone crisis, when Spanish and Italian sovereign rates soared without causing parallel increases in mortgage rates.
Outlook and Recommendations
Home loan production, which had fallen by two-thirds between 2022 and 2024, is slowly recovering. In August, it reached 13 billion euros, excluding renegotiations, according to the Bank of France. Credit balances are stabilizing: repayments now offset new loans, indicating that the market is finding a certain balance. However, household purchasing power for real estate is no longer increasing. The combination of stabilized prices, slightly rising incomes, and fixed rates around 3% limits the gain seen in 2024. The recovery remains technically fragile: existing homeowners hesitate to move for fear of losing their favorable rates, and first-time buyers struggle to complete their financing plans without specific assistance. « Housing can no longer be a budgetary adjustment variable, » argues Loïc Cantin. « A stable and incentive-based fiscal framework is needed, otherwise the recovery will falter. » The president of FNAIM calls for a rebalancing between support for new builds and existing properties, as well as a revival of rental investment, which is essential to smooth market operations.
This content has been automatically translated using artificial intelligence. While we strive for accuracy, some nuances may differ from the original French version.
