After two challenging years, France’s real estate market is finally showing renewed signs of life. The 2025 Laforêt Real Estate Report, published in December, shines a light on a steady recovery: over 900,000 property transactions are expected, prices have rebounded by 1.8% after a 7% correction, and mortgage rates have stabilized around 3.10%. For many hopeful homebuyers, these are promising signals—yet political uncertainty and fiscal debates around the 2026 budget continue to keep both buyers and sellers cautious.
Key Insights from the 2025 French Real Estate Report
- Over 900,000 sales expected in 2025, indicating a return to normal activity levels
- National property prices up 1.8% after two years of decline
- First-time buyers now make up 35% of transactions, thanks in part to the PTZ (zero-interest loan)
- Investors retreat amid regulatory pressure, making up only 17% of buyers (down from 25%)
- Rental market faces a historic crisis: demand up 11%, supply down 13%
Real Estate Demand on the Rise
The engine behind this recovery is a significant increase in buyer demand. According to Laforêt, buyer interest rose by 18% in 2025 across its network, with growth strong in Paris (+20%), the Paris region (+18%), and other regions (+17%). After waiting for further price drops in 2023-2024, many French households decided to move forward with their buying plans, realizing that endlessly falling prices and rates were not viable.
Interest has grown for both houses (+19%) and apartments (+17%). However, the final quarter of 2025 saw a slight cooling as caution prevailed ahead of political and budgetary debates.
Limited Increase in Real Estate Supply
While property listings increased slightly—overall supply grew by 10% nationally—the market still struggles to meet demand. The Paris market, in particular, saw an 8% increase in inventory in 2025 following an 8% fall in 2024, but this lagged far behind demand growth. Across France, a mismatch persists: in Île-de-France, for example, supply is up 10% while demand is up 18%).
Who’s Buying? First-timers Surge, Investors Retreat
The market’s revival is led mainly by “second-time buyers”—those selling to buy—and a growing number of first-time buyers, who now account for 35% of transactions, up from 30%. These first-timers are bolstered by lower mortgage rates and helpful government support for eligible areas.
Where the market lags is with investors, who now represent only 17% of purchases, compared to 25% previously. Rising taxes, rent controls, and costly requirements to meet energy standards have made investment less attractive—contributing directly to a severe crisis in the rental segment.
France’s Rental Market in Crisis
The rental market is experiencing its tightest squeeze in years. Demand soared by 11% in 2025, while supply shrank by 13%. As some landlords choose to sell—wary of taxes, stricter energy rules, and political uncertainty—rental supply is at a historic low just as increasing numbers of households are unable to buy property. This challenge remains center stage in the runup to the 2026 municipal elections.
Property Prices: Modest Recovery, Regional Gaps
After a 7% dip in 2023-2024, prices edged up by 1.8% in 2025, reaching €3,398 per square meter nationally. Paris saw the same 1.8% increase, to €9,640/m², though prices remain below the €10,000 mark. Price growth was steeper in cities such as Lyon (+3.5%) and Bordeaux (+3.0%), while some cities like Biarritz (-1.0%) and Dijon (-1.4%) saw prices slip further.
Market Fluidity and Price Negotiations
It now takes an average of 98 days to sell a property—a number only slightly up from a year ago, reflecting ongoing caution. Buyers and sellers are adjusting: negotiations are less frequent and margins have shrunk, but higher for houses that need renovation or have poor energy ratings.
2026 Outlook: Cautious Optimism Hinges on Policy Stability
Looking ahead, most expect sales volumes to remain robust in 2026, with moderate price increases likely—not much above inflation, according to Laforêt’s report (under 2% for apartments, 1.5% for houses). However, much depends on clear, stable fiscal and regulatory policies. Ongoing debates about the 2026 budget bill and uncertainty regarding landlord regulations are already causing delays in decision-making.
Bottom Line: Fragile Recovery Needs Stability
The fundamentals for a sustainable real estate recovery in France are present: restored activity, recovering prices, and stable borrowing costs. But for the rebound to last—and for more people to benefit—a steady regulatory hand and fiscal clarity are essential. For buyers, sellers, and investors alike, confidence in the market’s direction remains the missing ingredient for a true, broad-based recovery in 2026.
For continued updates on France real estate trends in 2026, keep following our real estate news and expert analysis.
