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Forecasts point to the French property market growing by 1.1% in 2025, signalling a recovery. Lower interest rates and limited housing supply are driving this growth.
After raising rates between 2022 and 2023, the European Central Bank began a gradual reduction in 2024. By September 2024, the ECB's base rate reached 3.5%, making mortgages cheaper, and the average rate on home loans fell to 3.6%. This trend led to increased demand for housing as more people could afford property purchases.
At the same time, the limited supply of residential properties on the market is adding pressure to prices. France is facing a shortage of new builds due to several factors, including strict building regulations and lengthy planning approval procedures. As a result, existing properties are becoming more valuable, fuelling price increases.
The price increase is particularly noticeable in major cities such as Paris and Lyon, where demand for housing is traditionally high. In Paris, for example, prices have stabilised after a dip in 2024, when the cost per m² fell below €10,000. At the same time, price growth is less pronounced in rural areas and small towns due to lower demand and many available properties.
Experts predict the positive trend in the property market will continue with a potential increase in the number of transactions by 10–15%. Banks' efforts to attract borrowers on favourable terms also support this growth.
Despite the positive dynamics, experts warn of risks: possible changes in tax policy and further rises in housing prices may reduce affordability.
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