The French real estate market experienced a third consecutive year of declining sales in 2024. Understanding the real estate trends of this year requires analyzing several distinct mechanisms: price dynamics, credit rate behavior, and the contraction of the rental stock.
Contraction of the rental supply: the missing factor in traditional assessments
Market analyses in 2024 focus on sales volumes and prices. One structural phenomenon remains under-documented: the rental supply has been reduced by more than 2.5 times since 2019, according to the Bien’ici Observatory.
Three mechanisms explain this contraction. The gradual withdrawal of energy-intensive housing (classified F and G in the energy performance diagnosis) mechanically reduces the available stock. The shift of property owners towards seasonal rentals diverts properties from the long-term market. Local regulatory constraints (rent controls, rental permits) discourage some landlords.
For potential buyers, this rental scarcity changes the calculation. When the rent of an apartment increases due to scarcity, the monthly payment of a mortgage becomes comparatively less discouraging, even with rates higher than those of 2021. By browsing the latest on Trend Immo, it is noted that some listings in tight areas are finding buyers faster than in the previous semester.
Real estate prices in 2024: an uneven decline across territories
After an average decline of 4% in 2023 (data from the Higher Council of Notaries), prices continued their correction in 2024, but in a heterogeneous manner.
The new market has experienced a more severe shock than the old one. This trend persisted in 2024, creating a production deficit that will weigh on supply in the coming years.
Old and new: two distinct pricing logics
In the old market, price stabilization began to be observed in the second half of 2024.
In the new market, construction costs (materials, environmental standards) keep prices at a high level despite the decline in demand. The price gap between old and new has therefore widened, directing more buyers towards renovation.
Mortgage rates and borrowing capacity in 2024
Mortgage rates have been the common thread of this transitional year. After reaching high levels at the end of 2023, they began a gradual decline.
The drop in rates has restored purchasing power to households in the second half. This renewed borrowing capacity partly explains the stabilization of sales volumes observed at the end of the year.
Real effort rate: an underappreciated indicator
The 2023-2024 Housing Survey by Insee provides rarely cited insights. The average net housing cost has slightly decreased over the long term, despite rising rents and monthly payments. Household incomes have increased more than these expenses, particularly after the abolition of the housing tax.
This finding nuances the alarmist discourse on accessibility. The real weight of housing in household budgets has not increased as much as prices alone suggest.
Energy renovation and real estate listings: the direct link
Energy renovation experienced a specific slowdown in 2024, before a recovery of aid and works expected in 2025. This slowdown had a concrete effect on listings: poorly rated properties in the energy performance diagnosis multiplied on the sales market, with their owners preferring to sell rather than renovate.
For a buyer, these properties represent an opportunity provided they master three parameters:
- The actual cost of renovation works, which varies greatly depending on the area, existing insulation, and the heating system to be replaced
- Eligibility for aids like MaPrimeRénov’, whose conditions have been tightened (some renovation projects are now excluded from the scheme)
- The regulatory timeline, as G-rated properties are gradually being removed from the rental market, reducing the possibility of renting the property while waiting for renovations
A property rated F or G purchased at a discount can become profitable after renovation, but the calculation requires a precise estimate of the works before signing the preliminary agreement.
Real estate listings in 2024: which segments to watch
The reshaping of the market has brought forth more dynamic listing segments than others. Houses in rural or suburban areas, driven by remote work, have fared better than apartments in city centers of secondary metropolitan areas.
The rental segment deserves special attention. The contraction of stock pushes rents up, improving gross yields for investors able to buy in medium-sized cities where sale prices have decreased.
- Medium-sized cities (50,000 to 150,000 inhabitants) combine falling purchase prices with increasing rental tension
- Properties with energy performance ratings D or E offer potential for value enhancement through renovation, provided available aids are checked
- New programs in tight areas benefit from the zero-interest loan (PTZ), the extension of which after 2027 has been announced
The real estate market of 2024 has acted as a filter: the best-informed buyers regarding rates, energy performance diagnosis, and price geography have found real opportunities. The stabilization in the second half leaves a significant stock of listings, with sellers more open to negotiation than in 2021 or 2022.
