France's Residential Property Market Analysis 2024

With continuously falling prices and slowing construction activity, the residential real estate market in France is still in the lows, with no sharp reversals expected until major decreases in interest rates and acceleration of macro-economic growth.

This extended overview from the Global Property Guide covers key aspects of the French housing market and takes a closer look at its most recent developments and long-term trends.

Table of Contents

Housing Market Snapshot

In Metropolitan France in Q1 2024 the price index of second-hand dwellings decreased by 5.16% year-on-year (-7.74% inflation-adjusted), marking the third consecutive quarter of decline in housing prices since Q3 2023, according to preliminary figures released by the National Institute for Statistical and Economic Studies (INSEE). Quarter-on-quarter, compared to Q4 2023, house prices dropped by 1.55% (-2.5% inflation-adjusted).

France´s house price annual change

In Île-de-France, the nation´s most populous and economically developed region, second-hand dwelling prices have fallen by 7.83% year-on-year, reaching €6,120 per square meter, as reported by the Chamber of Notaries of Paris. Notably, prices in Paris have seen declines for 11 consecutive quarters. With an average quarterly decline rate of -2.96%, the 7.95% drop in Q1 2024 marked the steepest quarterly decrease since the 1990s. Per square meter prices have fallen to €9,490, reflecting a return to late 2018 levels in the secondary housing market prices in the capital.

Second-hand dwelling price dynamics in Île-de-France region:

  Price per sq m (€), Q1 2024 Price per sq m (US$), Q1 2024 YoY (nominal) YoY (inflation-adjusted)
Île-de-France €6,120 $6,645 -7.83% -10.34%
Paris €9,490 $10,304 -7.95% -10.46%
Petite Couronne €4,920 $5,342 -8.21% -10.70%
Hauts-de-Seine €5,950 $6,461 -8.60% -11.09%
Grande Couronne €3,200 $3,475 -6.98% -9.51%

France Average Price of Existing Apartments in Paris graph

Data Source: Chamber of Notaries of Paris

According to Knight Frank´s latest Residential Property Market Report, price erosion is projected to persist in 2024, possibly surpassing 2023 levels, with variations depending on property type, location, and quality. The Superior Council of Notaries (CSN) suggests that these price adjustments might prompt cautious sellers to consider listing their properties, as taking advantage of the current market conditions could prove beneficial before any potential further decline in prices.

As house prices started to decline, rental yields demonstrated a slight upward trend, although the observed increases were only marginal. According to research by the Global Property Guide conducted in April 2024, in Q1 2024, average gross rental yields for apartments in France reached 4.52% with the highest gross rental yields recorded in Marseille at 4.94%, and Paris coming in second at 4.85%.

The residential sales slowdown, which began in 2022 and persisted through the subsequent year, has carried over into the first quarter of 2024. According to General Council for the Environment and Sustainable Development (CGEDD), sales of existing homes in France experienced a significant year-on-year decline of 23.3% in March, with only 822,000 units sold over the rolling 12-month period, marking a return to 2016 levels. Similarly, new home sales followed suit, reflecting a 25.3% year-on-year decrease, with just over 15,000 units sold as of Q1 2024, as reported by the Ministry of Ecological Transition and Territory Cohesion.

The downturn in residential construction activity has worsened, with both the number of permits issued and construction starts nearing historic lows of 1992-1993. In the first quarter of the year, the number of new dwellings authorized in France, excluding Mayotte, totaled 72,411 units, reflecting a 12.1% decrease compared to the corresponding period in 2023. This decline is notable, especially considering that the aggregate authorization volume for 2023 had already marked a significant year-on-year fall of 26.4%. Following a sharp decrease in new permits issued in 2023, the number of new dwellings also experienced a substantial drop of 23.7% during the first three months of 2024, totaling 53,794 units, according to INSEE data.

The French economy, the second largest in the eurozone, experienced a very modest expansion of 0.9% in 2023. Economic forecasts from both the International Monetary Fund (IMF) and the European Commission expect the economic activity to remain subdued in 2024, with an anticipated annual growth rate of 0.7%, before gradually accelerating in 2025. Inflation has been slowing down, reaching a year-on-year growth rate of 2.2% in 2024, its lowest level since October 2021, according to data from INSEE. The labor market remained stable in the first quarter of 2024, with an unemployment rate of 7.3%, safely below the 2012-2023 average of 8.6%. Mortgages continued to suffer from weakened demand due to high credit costs and elevated housing prices. Nonetheless, anticipation of upcoming repo rate cuts by the European Central Bank (ECB) drives positive expectations.

Historic Perspective: Market Cycles Responsive to Global Economic Condition and Government Measures

After a seven-year bust period of low prices and declining supply in the early and mid-1990s, France experienced almost a decade of dynamic expansion of the housing market, when prices surged by 150% (113% inflation-adjusted) between 1997 and 2007, in part due to several consecutive legislative schemes that incentivized investment with attractive property amortization system and eventually encouraged new development. During the construction peak of 2005-2007, the average annual volume exceeded 546,000 authorized and 461,000 started residential units.

Reacting to the global financial crisis, the market started to weaken towards the end of 2008, reaching its lowest point in Q2 2009 when the prices decreased by 9.1% (8.9% inflation-adjusted) year-on-year. Construction activity slowed down during this time as well: in 2009, the total number of permits issued dropped to just over 350,000 units, with only about 326,000 dwellings started.

A subsequent recovery followed, lasting until the end of 2011. From 2012 to 2015, the housing market experienced a moderate downturn, with house prices declining by an annual average of 1.7%, before starting to rise again in 2016. The average volume of residential construction authorizations reached 421,500 units between 2016 and 2022.

This upward dynamic persisted even throughout the COVID-19 pandemic, when the house price growth strengthened to 6.4% (6.3% inflation-adjusted) in 2020 and to 6.9% (4.1% inflation-adjusted) in 2021, marking the highest year-on-year increase since 2010. The European Central Bank (ECB) analysis ties the surprising resilience of housing markets across the eurozone during this crisis time to a different nature of the underlying shock, unrelated to economic fundamentals, as well as vigorous monetary, fiscal, and macroprudential policy responses.

In 2022, the market slowed down, with nominal prices increasing by 4.69% compared to the previous year. However, due to high inflation, this represented a real-term decline of 1.3%. The deceleration continued throughout 2023, and by Q4 2023, house prices for second-hand dwellings in Metropolitan France had decreased by 3.88% year-on-year, translating into a 7.33% inflation-adjusted fall.

In parallel, construction activity hit its lowest point since 2000, with both permits issued and new projects falling well below the previously established baseline at 322,563 and 266,516 units in 2023, respectively.

20-year annual house price change (based on end-of-year price index of second-hand dwellings), Metropolitan France:

Year Nominal house prices (%) Inflation-adjustedhouse prices (%)   Year Nominal house prices (%) Inflation-adjustedhouse prices (%)
2004 15.88 13.50   2014 -2.52 -2.79
2005 14.85 12.96   2015 -0.50 -0.59
2006 10.03 8.61   2016 1.50 0.99
2007 5.78 3.35   2017 3.25 2.08
2008 -3.83 -5.50   2018 3.24 1.32
2009 -4.08 -4.43   2019 3.88 2.76
2010 7.58 5.84   2020 6.40 6.32
2011 3.67 1.20   2021 6.93 4.10
2012 -2.05 -3.53   2022 4.69 -1.30
2013 -1.90 -2.53   2023 -3.88 -7.33

Data Sources: INSEE, OECD, Global Property Guide

20-year construction activity dynamic (authorized and started housing units),

France, excluding Mayotte:

France Residential Construction Dynamics in Mayotte graph

Data Source: INSEE

Demand Highlights: Falling Buyer Activity in Both Existing and New Homes Segments

According to the General Council for the Environment and Sustainable Development (CGEDD) data on the second-hand housing market, in March 2024, existing home sales in France were recorded at 822,000 units (rolling 12 months). This represents a substantial year-on-year decrease of 23.3%, marking the 21st consecutive month of sales decline. The number of existing housing units sold began to decrease in June 2022, with a year-on-year rate of -2.9%, resulting in a year-end figure of -5.1% for December 2022, compared to a solid 14.6% increase in December 2021. By the end of 2023, the indicator had further deteriorated to -22.1%.

France Number of Existing Home Sales graph

Data Source: General Council for the Environment and Sustainable Development (CGEDD)

New home sales have mirrored a similar pattern, experiencing a 25.3% year-on-year decrease in Q1 2024 (adjusted for seasonal variations and working days), as reported in the latest publication by the

Ministry of Ecological Transition and Territory Cohesion. The downturn in sales for new developments commenced in Q1 2022, slightly preceding the decline in second-hand sales, and has persisted with a negative trajectory since then.

According to the January 2024 French Property Market Report from the Superior Council of Notaries, sales volumes are projected to keep decreasing, albeit potentially at a slower pace, as the market moves towards a new stage of maturity. Sharp reversals in sales are not expected until significant decreases happen in both interest rates and home prices, as the current correction in property values is insufficient to offset the population´s loss of purchasing power.

Transaction costs for purchasing residential properties in France are considered moderate to high. There are no restrictions on the foreign ownership of property. Most properties, including apartments, are held as freehold. Apartments are commonly owned through two freehold structures: co-ownership (involving meetings, voting, and accounting among co-owners) and volumes, mainly used for mixed-use developments. Leaseholds are also an option, with durations extending up to 99 years.

Supply Highlights: Further Decline in Development Activity

In 2023, according to INSEE data, the overall housing inventory in Metropolitan France stood at 36.8 million units. Of these, 82% were designated as primary residences, 10% as secondary homes or occasional dwellings, and the remaining 8% were unoccupied. Within the primary residence category, 56% were single-family dwellings, while the remaining 44% consisted of multi-family units. Over the past four decades, the housing stock has expanded at an average annual rate of 1.1%.

France Units of Housing Stock in Metropolitan France graph

Data Source: INSEE

Residential construction activity in France continues to slow down, as INSEE data shows. In the first quarter of 2024, the number of new units authorized in France, excluding Mayotte, totaled 72,411 units, reflecting a 12.1% decrease compared to the same period last year. Previously, the aggregate 2023 authorization volume of 322,563 units marked a significant year-on-year decline of 26.4%. In contrast, 2022 saw a modest increase of 2.2%, though this was still a considerable drop from the 20.6% growth rate in 2021.

Similarly, the number of new dwellings started experiencing a sharp decline of 23.7% during the first three months of 2024, totaling 53,794 units. Throughout 2023, the number of new dwellings started to drop by 24.7%, compared to a smaller decline of 4.9% in 2022 and an increase of 10.4% in 2021.

France Number of Authorized and Started Housing Units graph

Data Source: INSEE

According to the French Building Federation (FBB), the ongoing crisis in housing construction is a result of the range of adverse factors, including the deteriorating macro-financial environment marked by increasing interest rates, the impact of the building materials crisis and the implementation of RE 2020 on construction costs, the absence of adjustments in housing assistance programs, and a less conducive climate for long-term planning and investment, all of which are contributing to the escalation.

If current market conditions persist, the Federation anticipates another record decline in new housing starts in 2024, with the total number of new dwellings started during the year estimated to be around 241,000 units - 120,000 units below the long-term average.

Mortgage Market: Encouraging Signals in Anticipation of Repo Rate Shift

While remaining lower than the peaks of the early 2000s and 2008, mortgage interest rates in France significantly exceed the 2023 and 2022 levels, fueled by the 4.5 p.p. uptick in the European Central Bank (ECB) repo rate over the last two years.

In March 2024, the average interest rate on all new housing loans was recorded at 3.50%, against 2.54% a year ago and 1.14% two years ago, the pattern observed for loans of varying maturity terms.

Interest rates on new housing loans by initial rate fixation (IRF):

  March 2024 YoY March 2023 YoY March 2022
New housing loans 3.50% ­↑ 2.54% ­↑ 1.14%
Floating rate and IRF up to 1 year 4.04% ­↑ 2.56% ­↑ 1.23%
IRF of over 1 and up to 5 years 3.69% ­↑ 2.57% ­↑ 1.22%
IRF of over 5 and up to 10 years 2.93% ­↑ 2.16% ­↑ 0.88%
IRF of over 10 years 3.50%, ­↑ 2.56% ­↑ 1.15%

The most recent dynamic, however, indicates a potential break in this extended growth trend. After two years of uninterrupted increases, the average interest rate on pure new mortgage loans (excluding renegotiations) fell sharply in 2024 from 4.17% in January to 4.12% in February, and 3.95% in March.

France ECB Repo Rate and Interest Rates on New Housing Loans graph

Data Source: ECB

According to the annual survey carried out by Ifop Group, 87% of first-time buyers and 80% of all French buyers use credit to acquire their prime residence.

Most new housing loans issued are long-term, with less than 4% not exceeding a 10-year maturity. The average maturity of new housing loans for the purchase of a primary residence reported most recently by the Bank of France is 23 years, while the average residual maturity of the outstanding loans is about 16 years.

On par with the general trend, the average interest rate on outstanding housing loans in France rose from the previous periods and was recorded in March 2024 at 1.69%, against 1.54% in March 2023 and 1.50% in March 2022.

Interest rates on outstanding housing loans by original maturity:

  March 2024 YoY March 2023 YoY March 2022
Outstanding housing loans 1.69% ­­↑ 1.54% ­­↑ 1.50%
Original maturity up to 1 year 2.68% ­­↑ 1.70% ­­↑ 1.32%
Original maturity over 1 and up to 5 years 2.28% ­­↑ 1.64% ­­↑ 1.17%
Original maturity of over 5 years 1.69%, ­­↑ 1.53% ­↑­ 1.50%

France Interest Rates on Outstanding Housing Loans graph

Data Source: ECB

The overall dynamic expansion of the French mortgage market from 24% to 50% of GDP over the last two decades, has slowed down, suffering from the weakened demand due to high cost of credit and nominal real estate prices. The total value of outstanding housing loans fell by 2.6% y-o-y in March 2024 to €1.30 trillion (US$1.41 trillion) in contrast with the average annual growth of 5.6% between 2015 and 2022.

At the same time, the production of pure new housing loans (excluding renegotiations) in relation to GDP remains higher in France than in neighboring European countries: 4% of GDP between April 2023 and March 2024, compared to the 3% eurozone average.

France Outstanding Housing Loans graph

Data Source: ECB

The majority of new housing loans being granted at fixed interest rates and the share of variable-rate loans in France remaining significantly lower than the eurozone average (4% compared to 17% in March 2024), makes the country´s housing market more stable overall.

After a sharp decline in 2023, the production of housing loans has not yet rebounded in the first quarter of 2024 and currently maintains the level close to those recorded before 2016-2022 period of low interest rates.

France New Housing Loans Paris graph

Data Source: Bank of Franc

The slowdown in housing loans is not unique to France and has also been observed among other European countries. The Bank of France, however, foresees the resumption of credit production, based on the latest market signals, including the downward shift in the interest rate trend and the number of consultations of the "Fichier des incidents de paiement des particuliers" - a file that records payment incidents from individuals and which is an essential prerequisite for a bank to grant a loan.

Furthermore, the European Central Bank (ECB) has indicated that it may cut its interest rates from their historic high levels at the upcoming June meeting, as the eurozone inflation has dropped to a near three-year low of 2.4% in April. In an interview with the Financial Times, the ECB´s chief economist Philip Lane said: "Barring major surprises, at this point in time there is enough in what we see to remove the top level of restriction."

Rental Market: Marginal Increase in Rental Yields Due to Falling Purchase Prices

In Q1 2024, average gross rental yields for apartments in France reached 4.52%, according to research by the Global Property Guide conducted in April 2024. As house prices started to decline, rental yields demonstrated a slight upward trend, although the observed increases were only marginal.

The highest gross rental yields in France were recorded in Marseille at 4.94%, with Paris coming in second at 4.85%. It is important to note that the Paris yield results may not reflect the situation in less desirable locations, as the research sample focuses on high-end city center areas, which tend to have lower yields.

Average gross rental yields by submarket:

  April 2024 January 2024 January 2023 Jan, 2024 vs Jan, 2023
Paris 4.85% 4.72% 3.96% ­­↑
Bordeaux 4.34% 4.59% 3.96% ­­↑
Lyon 4.22% 4.48% 3.98% ­­↑
Marseille 4.94% 4.67% 4.50% ­­↑
Montpellier 4.52% 4.80% 4.18% ­­↑
Nantes 4.64% 4.65% 4.02% ­­↑
Nice 4.39% 4.43% 4.30% ­­↑
Toulouse 4.26% 4.11% 4.05% ­­↑

Over the last decade, the growth in apartment prices has significantly outpaced the growth in rents at both the national and capital levels. Between 2013 and 2023, apartment prices in France surged by 25%, whereas rental prices saw a more modest increase of just 14%. This slower increase in rental prices (an annual average of 1.2% during the corresponding period) can be partially attributed to the regulatory nature of the rental market where during certain periods, allowable rent increases were set below the inflation rate.

During the first quarter of 2024, the Housing Rent Reference Index in France increased by 3.5% compared to the same period last year, according to INSEE. This increase is subject to a cap as per Article 12 of the 2022-1158 Act on Emergency Measures for the Protection of Purchasing Power of August 16, 2022, modified by Article 2 of the 2023-568 Act of July 7, 2023. These regulations specify that the annual change in the housing rent reference index may not exceed 3.5% between the third quarter of 2022 and the first quarter of 2024.

As of Q1 2024, the average rent for two-bedroom apartments in Paris, as surveyed by the Global Property Guide, ranged from €1,770 (US$ 1,920) to €3,650 (US$ 3,960) per month.

France Housing Rent Reference Index graph

According to INSEE, in 2023, 57% of France´s housing stock used as main residences was owned by their occupants, 40% were rented, and 3% were provided free of charge. Among the total renters, 44% rented from public landlords, while 56% rented from private landlords.

The rental housing market in France is heavily regulated and subject to changes with each new political majority. Two main regulatory frameworks shape the landscape: firstly, rent controls aimed at improving housing accessibility (the most recent summary available from the Superior Council of Notaries), and secondly, a tax exemption system for rental property investments regulated by Pinel law, which replaced the previous Duflot scheme.

Socio-Economic Context: Slow-Paced Growth and Ease of Inflation Pressure Projected

After the massive 7.5% drop in 2020 and the subsequent rebound growth of 6.3% and 2.5% in 2021 and 2022, respectively, the French economy showed only a 0.9% growth in 2023, not yet reaching the pre-pandemic annual expansion baseline.

Both the International Monetary Fund (IMF) forecast and the European Commission projections see economic activity in France remain subdued in 2024 (0.7% annual growth) but pick up the pace in 2025 (1.3%-1.4% annual growth).

France GDP Growth and Inflation graph

Data Source: IMF

The country´s budget deficit which had previously reached 8.9% of GDP in 2020 due to the French government´s emergency stimulus measures, fell to 5.5% of GDP in 2023 and is forecast to further decrease to 5.3% in 2024 and to 5.0% in 2025 as the overall economic conditions stabilize.

In 2023, the European Union´s target gross debt ratio threshold (60% of GDP) was exceeded by 13 member states, including France. As reported by INSEE, the French gross public debt in 2023 sat at 111.9% of GDP, still significantly exceeding the pre-pandemic level of 97.9% recorded in 2019. Furthermore, the downward trend of the previous two years is forecast to turn around with the debt increasing to 112.4% and 113.8% of GDP in 2024 and 2025, respectively.

Nationwide inflation, measured by the Consumer Price Index (CPI), slowed to 2.2% year-on-year in April 2024, down from 2.3% the previous month and significantly lower than the 5.9% recorded in the same period last year. According to INSEE data, this April´s inflation rate is the lowest since October 2021.

The European Commission forecasts a progressive decrease in inflation, projecting it to fall to 2.5% in 2024 and 2.0% in 2025, following a rate of 5.7% in 2023. The downward trend is expected to be driven by decreasing energy and commodity prices, albeit at a slower pace, as wage increases are still anticipated to contribute to inflation in the services sector.

The labor market remained stable, with the ILO unemployment rate in Metropolitan France recorded at 7.3% in Q1 2024 - unchanged from the previous quarter and 0.4 p.p. higher than the same period last year, according to INSEE.

The European Commission forecasts a slight increase in the jobless rate to 7.7% for 2024 and 7.8% for 2025, due to the strong expected growth of the active population, mainly resulting from the 2023 pension reform. Nevertheless, the indicator is projected to remain below the 2012-2023 average of 8.6%.

France Unemployment Percentage graph

Data Source: INSEE


  1. National Institute of Statistics and Economic Studies (INSEE)
    1. Price index of second-hand dwellings:
    2. Construction of residential buildings:
    3. Annual Estimates of the Housing Stock (EAPL):
    4. The Housing Rent Reference Index in Q4 2023:
    5. General government national accounts - first results - year 2023:
    6. Consumer price index - final results - April 2024:
    7. ILO Unemployment and Labour Market-related indicators - first quarter 2024:
    1. Government deficit/surplus, debt and associated data:
  3. Organization for Economic Co-operation and Development (OECD)
    1. OECD Data Explorer:
  4. European Central Bank (ECB)
    1. ECB Data Portal:
    2. Key ECB interest rates:
    3. US dollar/Euro, Quarterly - average exchange rate for Q1 2024:
    4. The euro area housing market during the COVID-19 pandemic:
  5. Bank of France
    1. Bank of France Data Portal:
    2. Loans to individuals, France 2024Mar:
    3. Overview of household housing loans - March 2024:
    4. ACPR data on monthly housing loan production:
  6. International Monetary Fund (IMF)
    1. Country Overview: France:
  7. European Commission
    1. Economic forecast for France:
  8. Superior Council of Notaries (CSN)
    1. French property market report no. 62 - January 2024:
    2. Setting the rent for a new lease contract:
    3. Investment in rental property - PINEL system:
  9. Chamber of Notaries of Paris
    1. Price per m² of old apartments underlying the Notaries-INSEE indices (FR):
  10. General Council for the Environment and Sustainable Development (CGEDD)
    1. House Prices in France: Property Price Index, French Real Estate Market Trends in the Long Run:
  11. Ministry of Ecological Transition and Territory Cohesion
    1. New homes - Sales to individuals in the first quarter of 2024 (FR):
  12. Ministry of the Economy, Finance and Industrial and Digital Sovereignty
    1. The Pinel rental investment system (FR):
  13. French Building Federation French Building Federation (FFB)
    1. 2023 assessment and 2024 forecasts in construction (FR):
  14. Knight Frank
    1. The Residential Property Market, France, April 2024:
  15. Financial Times
    1. European Central Bank is ready to start cutting interest rates, says chief economist:
  16. Ifop Group
    1. Real estate buying and selling behaviors survey, 2023 (FR):