The real estate market in France entered 2024 in a climate of apparent stabilization. Transaction volumes have stopped declining, interest rates have begun to decrease, and prices in the existing market have shown timid signs of recovery in certain areas. The Notaires de France describe a very slight increase in prices at the national level, primarily driven by Paris and Île-de-France. The rest of the country presents a very different picture.
Energy performance of housing: the true divide in the 2024 real estate market
The regulatory constraint related to the energy performance diagnosis (DPE) has sustainably reshaped purchasing criteria. Properties rated A, B, or C on the energy scale maintain their liquidity and find buyers within reasonable timeframes. In contrast, homes rated F or G, sometimes referred to as thermal sieves, are experiencing an increasing depreciation.
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This pressure does not solely come from buyers. The gradual ban on renting out the most energy-intensive properties is pushing some landlords to sell, increasing the supply in an already unattractive segment. The result is a two-tier market structured by energy class.
For buyers, the calculation has changed. The cost of renovation work is now part of the negotiation from the first visit. A poorly rated property no longer sells for the same price as an equivalent well-rated home, even in a sought-after neighborhood. Field reports vary on the exact extent of this depreciation by region, but the trend is the same everywhere.
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Recent data compiled in all the news from Trend Immo confirms that energy performance weighs as heavily as location in the decisions of purchasing households.
Real estate prices in Île-de-France and the provinces: two distinct realities
Île-de-France shows a more visible recovery than the rest of the country, both in sales volume and prices. Paris is the focus of media attention with signs of stabilization, even a slight increase in certain districts. Data from notaries in the region point to a measurable uptick in activity.
In the provinces, the situation is more mixed. Metropolises like Toulouse and other large urban areas capture part of the demand, particularly for new or renovated properties. In contrast, rural areas and medium-sized towns remain largely excluded from this recovery. Selling times are lengthening, negotiation margins are increasing, and some sectors are still seeing prices decline.
This geographical gap is not new, but it has intensified in 2024. The fragmentation of the market into micro-local markets makes any national reading misleading. An average indicator showing stability hides diametrically opposed realities from one department to another.
Buyer profile in 2024: owner-occupiers, not investors
The Notaires de France highlight a shift in the profile of buyers. The activity reflects more usage purchases than rental investment strategies. Households buying in 2024 are doing so to live in the property, often after a longer period of reflection than before the crisis.
Several factors explain the relative withdrawal of investors:
- The regulatory pressure on energy-intensive homes makes rental investment riskier, especially for older properties requiring heavy renovations.
- Net rental yields have been compressed by rising renovation costs and rent caps in certain tight areas.
- The interest rate context, even though decreasing, remains less favorable than the pre-2022 period, limiting the leverage effect of credit for rental arrangements.
This rebalancing towards owner-occupiers has a direct consequence on prices. Demand is more sensitive to the quality-price ratio and the defects of the property. Buyers take their time to compare, negotiate, and are no longer hesitant to walk away if the property does not meet their energy or location criteria.
Real estate development and new housing: a sector struggling to restart
The new housing market has not experienced the same stir as the existing one. Real estate development in France continues to face structural difficulties: high construction costs, dwindling available land in tight areas, and extended timelines for building permit approvals.
The production of new housing remains below estimated needs, which fuels an imbalance between supply and demand in the metropolises. Real estate developers report a booking volume still low compared to previous years.
This construction deficit has an indirect effect on the existing market. Due to insufficient new supply, part of the demand is shifting towards well-rated existing properties, further accentuating the divide between high-performing homes and those needing renovation.
Real estate market trends at the end of 2024: stabilization or stagnation
The word “recovery” has been widely used to describe the real estate market in the second half of 2024. The available data does not allow for a conclusion of a true cycle reversal. What the figures show is a end to the decline in transaction volumes, not a vigorous restart.
Sales of existing homes over a twelve-month period have stopped declining, which is a positive signal after two years of contraction. The gradual decrease in interest rates has restored some purchasing power to households, although it does not fully compensate for the price increases that occurred between 2020 and 2022.
The most accurate reading of 2024 is that of a market plateau, fragmented by geography and energy performance. Buyers have returned, but they are more selective. Sellers who refuse to adjust their prices or take into account the DPE rating of their property remain stuck. The fluidity of the market now depends as much on the intrinsic quality of the housing as on its location.