French property bounce back: where is leading the way?

The French property market is bouncing back, with interest in rural property particularly strong, estate agents report.  Buyers’ purchasing power has improved and many sellers are accepting

lower prices, though prices in rural areas have held up better than those in large cities.  However, those who want to buy should not delay, says Charles Marinakis, president of the Century

21 network of estate agents, as “the drop in prices in non-newbuild property will be over in 2025”.  Rises of 2-3% are likely across France in the course of 2025, he predicts. As for

sellers, while it might be worth waiting a little for those in no hurry, “houses that are selling [now] are ones where sellers are realistic about prices”, said Joanna Leggett, of the large

Leggett Immobilier network of English-speaking agents in France. Buyers are now more able to obtain mortgages as banks have dropped rates and are reported to be more flexible over the amount

of deposits required.  'FRENCH INVESTORS SEEK REFUGE IN PROPERTY' Much wider access to interest-free loans is also promised by France’s housing minister, although the timing for

this remains unclear due to the delays in passing a full 2025 budget law.  GRAPH: HOW FRANCE’S INFLATION RATE COMPARES WITH OTHER EU COUNTRIES Mr Marinakis said: “We saw the market for

homes, excluding new builds, continue to fall in the first half of 2024, but sales picked up in the summer and the last quarter showed very strong growth.”  He puts the turnaround down to

successive reductions in interest rates – around 3.3% at the end of December, down one point on the previous year. Inflation is also coming under control – under 2% – boosting household

confidence to invest and banks are prepared to lend more. “The unstable political situation has not disturbed the market, and we can even say that investing in property is, more than ever,

somewhere for French people to seek refuge.”  Lower prices also helped the market recover over 2024, with Century 21 recording an average price fall of 3.8% for houses and 0.7% for flats for

the year.  Popular person-to-person sales site pap.fr predicts a “moderate price rise of 2-3%” on average in 2025, but it notes that buyers are still aware of the rise in rates compared to

a historic low of 1% in 2021, so are still looking for “the best value for money”.  As a result, “sellers must not get carried away and be overly optimistic”, it states.  Overall, however,

it reports 5% more demand from buyers in the last quarter of 2024 compared to 2023. Paris and the wider Ile-de-France region have been slower to pick up, compared to other areas.  Thomas

Lefebvre, vice-president at large property websites SeLoger and Meilleurs Agents, predicts a clear upward swing from this year.  Indeed, it is already under way, by their estimates, which

put prices up 0.4% overall in 2024, but with rural areas in the lead (up 2.1%). Read more: What is the role of an estate agent when buying a property in France? PRICES CONTINUE TO RISE IN

SOME CITIES On average, prices fell slightly in Paris and large cities, they report. However, there were exceptions, with recent rises under way in several cities, such as Rennes, Lyon,

Nice, Strasbourg and Lille.  Century 21 estimates that if interest rates do not rise again, there could be up to 850,000 sales in 2025.  This is considerably below a peak of 1.2 million in

2021 but “reasonable” compared to levels historically. Pap.fr also estimates around 800,000-850,000 sales this year, compared to notaires’ estimates of 780,000 in 2024.  Read more: MAP: How

much can you negotiate off a property purchase in France in 2025? 'BANKS KEEN TO LEND' In December, the European Central Bank lowered its main interest rate to 3%, with analysts

expecting more cuts to follow as inflation in the euro-zone appears contained. Mortgage broker Meilleur-taux, says buyers at the end of 2024 could buy homes 6m2 larger than at the end of

2023, based on 3.35% average rates.  Even so, since 2019 and the post-Covid property boom, average purchasing power has fallen significantly.  “If we look at the five years between 2019 and

2024, the average buyer in France has lost 21m2,” said communications manager Maël Bernier. “So even though we have seen a marked improvement, we are still a long way off from the buyer’s

market we had in 2019.” However, she is optimistic about 2025. “We are getting positive signs from most banks: they are keen to resume lending,” she said.  She predicted that rates might

fall further after the first quarter, perhaps to 3% on average. Ms Leggett confirmed a sharp uptick in sales in the last quarter of 2024, both from French and international buyers.  “The

rise has been across the board, including for rural properties,” she said. She added that, when it comes to international buyers, they are “not very price-sensitive”.  “Most are now looking

to buy into the French lifestyle, so it is the right property and being able to move into it straight away which is the attraction.  “One thing we notice is people are less interested in

buying properties to renovate. They like to have everything done up.”