France real estate is witnessing a potential stabilization in new property prices after a prolonged decline. This analysis delves into the latest trends, market pressures, and emerging opportunities for buyers.
The France’s real estate market is undergoing a significant transformation, as new property prices show signs of stabilization after a prolonged period of decline. According to the latest barometer published in March 2025 by Trouver-un-logement-neuf.com, based on data from over 3,200 real estate programs, the national trend indicates a decrease in supply coupled with a slight increase in prices. This development raises a pivotal question: is the downturn in property prices truly behind us?
Towards a Turning Point in the New Property Market
Stabilization Follows the Fall in Prices
After experiencing a sustained decline, new property prices appear to be reaching a turning point. The Trouver-un-logement-neuf.com barometer reveals a modest increase of 0.28% in the price of new three-room apartments over the past six months. The national average price has now reached €320,724, signaling the end of a downward cycle that began in early 2023. This stabilization occurs against a backdrop of post-crisis tension, where rising interest rates have significantly slowed down real estate projects.
Since 2022, the average mortgage rate has surged from 1.13% to 4.24% by the end of 2024 (source: Observatoire Crédit Logement/CSA), drastically reducing households’ borrowing capacity. In response, developers have implemented various incentives to stimulate sales, including the reimbursement of notary fees and direct discounts on list prices.
Commercial Offers Are Becoming Scarce
The era of abundant discounts appears to be waning. According to the Fédération des Promoteurs Immobiliers (FPI), promotional operations fell by 20% in the first quarter of 2025 compared to the same period in 2024. This decline suggests a gradual return of buyers to the market, as even major players like Bouygues Immobilier and Nexity are moderating their offers. Currently, notary fees are only being offered to first reservators in targeted areas, indicating a shift in market dynamics.
New Property Price Increases Across the Country
Cities on the Rise
The increase in new property prices is no longer confined to major metropolitan areas. The barometer identifies 53 cities experiencing price growth, compared to just 40 cities witnessing declines. Notably, Paris has seen its prices soar by 22.36% over six months, with the average price for a three-room apartment reaching €898,700. This surge can be attributed to a scarcity of supply, the city’s enduring attractiveness despite a saturated market, and a high concentration of rental investments.
Other cities also demonstrate significant price increases:
- Lille: A vibrant student city, has recorded a 19.4% increase, driven by developments in the station and Vauban districts.
- Annecy: The area’s tourist appeal and Swiss demand have contributed to a price rise of 10.82%.
- Avrillé: Located on the outskirts of Angers, benefits from the metropolisation of the Angers basin.
- Dinard: This coastal town attracts a wealthy secondary clientele, further driving up prices.
Residual Declines Persist in Some Jurisdictions
Despite the overall upward trend, certain localities continue to experience market corrections. Mountainous areas, in particular, are facing significant declines:
- Alpe d’Huez: Prices have plummeted by 25.06%, attributed to large inventories and fluctuating seasonal demand.
- Capbreton: Despite its seaside allure, prices have decreased by 14.77%, impacted by a slowdown in off-plan projects.
- Villeurbanne: This suburb of Lyon has seen a decline of 14.23%, influenced by the economic slowdown in the region.
- Bordeaux: After a robust post-COVID increase, the city is now experiencing a correction phase with a 13.01% drop.
The Most Expensive and Affordable Cities
The barometer reveals a contrasting picture of the French real estate landscape, highlighting disparities that reinforce inequality in access to housing, particularly in tense areas (zones A and B1).
Declining Supply: Growing Tension
One of the key findings of the barometer is the notable decrease in the commercial offer. Over six months, the number of cities with at least five programs has dropped from 117 to 94. This contraction is attributed to several factors:
- Decrease in Building Permits: A staggering 25% decline in building permits over the past year (source: Ministry of Ecological Transition).
- Increase in Construction Costs: An 11% rise in construction costs over two years, driven by escalating raw material prices (INSEE).
- Freeze on Land Purchases: Many developers are opting to freeze their projects to mitigate risks.
The Return of the PTZ: A Catalyst for Demand
The reintroduction of the Zero Interest Loan (PTZ) on April 1, 2025, could significantly alter the market landscape. The Ministry of the Economy anticipates that over 60,000 potential beneficiaries will emerge in the first year. The PTZ finances up to 50% of the housing price in specific areas, which is expected to stimulate demand.
A Weakened Industry
The real estate development sector is currently in crisis, with a reported 30% reduction in jobs over the past two years, project freezes, and declining profit margins. While the RE2020 regulations are essential for sustainability, they introduce new technical and financial constraints that could limit the industry’s capacity to meet future demand.
What Are the Opportunities Before the Next Outbreak?
A Window of Opportunity for Buyers
The current market presents a unique window of opportunity for buyers. Those with a down payment or access to the PTZ can still take advantage of relatively contained prices in several secondary agglomerations. Notaries in France emphasize the rental yield of new constructions, estimated at an average of 3.5% to 4% gross, along with favorable taxation under the Pinel or Pinel Plus law.
RE2020: A Lever for Future Valuation
Properties that comply with the RE2020 standards are projected to consume an average of 30% less energy than those built under the previous RT2012 regulations. This energy efficiency is becoming a crucial criterion for buyers who are increasingly concerned about sustainable and economical investments.
The March 2025 barometer on new property prices indicates that the French real estate market is entering a new phase characterized by reduced supply, increasing demand, and a recovery in prices. As the market stabilizes, those who delay their purchasing decisions may find themselves facing higher prices in the future. The evolving landscape presents both challenges and opportunities, making it essential for potential buyers to stay informed and act decisively.
