With lower credit rates and rising incomes, conditions appear favorable for a real estate rebound.

2024 marks the end of three years of declining transaction volumes; the worst is behind us,” according to Thomas Lefebvre, Vice President of Data at Se Loger and Meilleurs Agents. While property prices continue to fall, the rate has slowed over the past year. In April, France saw its largest annual drop, with prices down 3% nationwide. As of September 1, prices had fallen 1.3% year-on-year. In Paris, prices have dropped 14% over five years, bringing real estate purchasing power above 2019 levels, despite credit rates being three times higher than back then.

900,000 Sales by 2025?

Forecasts for 2025 suggest a shift, with an expected price increase for the first time since 2022. Several factors align favorably: incomes are rising faster than inflation, which continues to decelerate, and mortgage rates may stabilize or even fall below 3.5% by year’s end. These conditions could boost demand, restoring buying power and prompting price increases. Additionally, housing supply has stabilized after three years of growth, adding to a positive outlook. Se Loger and Meilleurs Agents predict a modest 2% price increase across France in 2025.

Transaction volumes also look promising: after an expected low of 771,000 sales in 2024 (the lowest since 2016), predictions point to a rebound to 900,000 sales in 2025. While this increase represents a recovery after a 36% decline from the August 2021 peak of 1.2 million transactions, it still falls short. “We would need 100,000 additional sales to reach the normal pace aligned with France’s population growth,” Lefebvre notes.