The French real estate market in 2024 has hit an activity floor rarely observed. With less than 750,000 transactions for the year according to the Conseil supérieur du notariat, the decline has reached more than a third compared to the peak of 2021. The real estate trends this year are not just a simple price correction: they reveal structural imbalances between supply, demand, credit costs, and regulatory constraints.
DPE for small spaces and tourist rentals: the regulatory adjustments overlooked
The real estate news of 2024 has been largely commented on from the perspective of prices and rates. A regulatory aspect has received less attention, even though it concretely changes the value of certain properties.
Since July 1, 2024, a DPE calculation method adapted for small spaces has come into effect. Studios and small apartments, systematically penalized by the consumption/surface ratio of the standard calculation, can now achieve a better energy rating without any renovation work. For landlords in this segment, the reclassification changes the game: a property that moved from F to D escapes progressive rental bans.
Another technical point: the law of November 19, 2024, requires a DPE for newly offered furnished tourist rentals subject to change of use authorization. This measure directly targets seasonal rentals in tight areas. Investors positioned in the short-term rental market must factor in this compliance cost, which did not exist a year ago.
By following real estate news with Mon Projet Immo, these regulatory developments are detailed as they are implemented.
Real estate transactions in 2024: anatomy of a market at the floor
The market has recorded a third consecutive year of declining sales. The first half continued the contraction that began at the end of 2022, while the second half showed a stabilization of volumes.
Geographic disparities are marked. This territorial heterogeneity indicates that the correction does not follow a uniform national pattern but reflects local dynamics of prices and demand.
A distinct signal of the decline in sales deserves attention: the contraction of building permits. The new housing market has seen sales of new homes drop by about half, and listings have similarly decreased. Fewer permits issued today means less available supply in two to three years, potentially preparing a bottleneck in the renewal of the housing stock.
Real estate prices and credit rates: the determining couple of 2024
After a price drop of about 4% in 2023 (annual average according to the Conseil supérieur du notariat), the correction has continued in 2024 in a more moderate manner. The trend is towards stabilization rather than a new widespread drop, even if some areas remain under pressure.
On the credit side, the gradual easing of key rates has partially restored households’ borrowing capacity, constituting the main lever of support for demand in the second half.
The reasoning to be held is as follows:
- The drop in rates improves buyers’ solvency, but does not fully compensate for the increase accumulated since 2022. A borrower in 2024 finances significantly fewer square meters than in 2021 at the same monthly payment.
- Prices have not fallen enough to absorb the additional cost of credit in most major metropolitan areas. The market remains in an adjustment phase.
- Sellers who have not revised their prices downward see their properties stagnate. The average selling time has lengthened in the old market, indicating a persistent gap between listed prices and accepted prices.
Rent control: the limits highlighted by the Court of Auditors
Rent control, extended to several urban areas in recent years, is subject to a critical assessment rarely included in current real estate analyses. The Court of Auditors points out structural difficulties in the system.
The representativeness of data collected by local rent observatories remains uncertain. The reference rents calculated do not always reflect the real diversity of rental markets, particularly in neighborhoods where the housing stock is very heterogeneous in terms of quality and size.
The medium-term effects on the rental supply are also difficult to measure. Too strict rent control can discourage the rental of certain properties, which exacerbates rental tension in already deficient areas. For rental investors, this regulatory uncertainty constitutes a risk factor to be integrated into profitability calculations.
2025 outlook for the French real estate market
Several indicators converge on one point: a low plateau seems to have been reached. The stabilization of the second half of 2024 suggests a gradual restart of transaction volumes in 2025, provided that the downward trend in rates is confirmed.
Three variables will determine the pace of this recovery:
- The level of credit rates in the first half of 2025 and the monetary policy of the ECB.
- The evolution of the job market, with the rise in business failures constituting a fragility factor for demand.
- The concrete impact of new energy constraints on the housing supply, both in the old market (bans on renting thermal sieves) and in new constructions (construction costs incorporating RE2020 standards).
The real estate market of 2024 has functioned as a filter. It has excluded the least solvent buyers, lengthened selling times, and forced partial price adjustments. The expected recovery in 2025 will not be a return to the volumes of 2021, but rather a gradual normalization around a new equilibrium threshold between prices, purchasing power, and regulatory constraints.
