The French real estate market went through a marked contraction phase between 2023 and 2024, with a decline in transaction volumes reaching its low point in 2024. This correction, driven by the rapid rise in credit rates and a tightening of lending conditions, has reshaped the balance of power between buyers, sellers, and investors.
Thermal sieves and rental bans: the regulatory factor weighing on prices
Competitors treat the energy transition as an underlying trend. The subject deserves a more precise framing: since January 1, 2025, a property rated G on the DPE can no longer be rented legally. It is considered unfit for habitation, exposing the landlord to tenant claims and the inability to sign a new lease.
This ban is not theoretical. It generates an influx of properties put up for sale by owners who cannot or do not want to undertake renovation work. For a buyer, these properties represent a discount at purchase, but the cost of bringing them up to standard can absorb part of the financial advantage.
The resources published on Magazine Immobilier allow tracking the evolution of these regulatory constraints and their concrete effects on property valuation.
The ban will extend to properties rated F starting in 2028, and then to E in 2034. Landlord owners anticipating these deadlines are already weighing between renovation and sale. For buyers, the central question remains the gap between the displayed discount and the actual budget for energy renovation, which varies significantly depending on the building’s configuration.
Transaction volumes and real estate prices: where is the correction in France
The decline in prices was confirmed in 2024, with strong geographical disparities depending on the regions.
However, the second half of 2024 showed a stabilization of volumes, interpreted as a low plateau. The drop in sales was halted starting in the summer of 2024, without signaling a significant rebound. Properties located on the outskirts of major cities have fared better, driven by a demand that prioritizes the ratio between living space and budget.
Several market analyses published in 2025 confirm a shift: significant increase in transaction volumes and a halt in the decline of prices. The market remains significantly below the peak of 2021, with about a quarter less volume.
Mortgage rates and the return of first-time buyers in 2025
The movement of credit rates structured the entire 2023-2024 sequence. Rates nearly quadrupled in eighteen months, excluding a portion of households from the market. The European Central Bank then initiated a cycle of rate cuts, which gradually eased financing conditions.
Data from ACPR statistics indicate a net decrease in average rates between the peak at the beginning of 2024 and the end of 2025, accompanied by a marked increase in housing credit production. This easing has allowed the return of first-time buyers, a segment that had been most affected by the tightening of borrowing conditions.
For a buyer entering the market today, the window combines corrected prices and declining rates. Field reports diverge on this point: some professionals report a resurgence of competition for the best-located properties, while others observe that selling times remain extended in less tight areas.
Criteria to check before borrowing in this context
- The debt-to-income ratio remains capped at 35% of net income, including insurance, according to the recommendations of the HCSF still in effect.
- The maximum repayment term is maintained at 25 years (27 years for a new purchase with a deferral).
- The personal contribution expected by banks has increased since 2022: files without contributions are more difficult to process, even with the easing of rates.
Rental investment in 2024: the segments that have resisted
The rental market has faced dual pressure: rising regulatory constraints (DPE, rent control in tight areas) and a scarcity of supply in certain metropolitan areas. Owners exiting the rental market due to an inability to renovate are not being replaced at the same speed by new investors.
Properties renovated with a good DPE rent faster and at better yields than energy-intensive properties, creating a premium for energy performance in the profitability calculation. Business offices through SCPI have also constituted a yield pocket for investors who preferred to avoid direct management.
Seasonal rentals, after the effect of the 2024 Olympics in Paris, have seen their yields normalize. Municipal regulations on tourist rentals have tightened in several major cities, reducing the attractiveness of this segment for new entrants.
- The gross yield of a classic rental investment now depends as much on the DPE rating as on the location.
- SCPI allows exposure to the real estate market without direct management, but their liquidity remains limited in a tight market period.
- Rent control, active in about ten metropolitan areas, caps rental yield and must be integrated from the financial simulation stage.
The French real estate market is emerging from a correction cycle that lasted nearly three years. Signs of recovery exist, driven by the easing of credit and the gradual return of buyers. The available data does not allow for a conclusion of a rapid return to 2021 volumes.
The floor seems to have been reached and the dynamics are slowly reversing. For those buying or investing, a careful reading of the DPE, the real borrowing rate, and local constraints remains the best decision filter.