The French real estate market has gone through a correction phase marked by a decline in prices, a rise and then a fall in interest rates, and a tightening of rules related to the energy performance of housing. Understanding these mechanisms allows for making purchasing, selling, or investment decisions based on concrete data rather than impressions.
EPC and rental bans: the timeline that redefines rental investment
Since January 1, 2025, properties classified G on the EPC are prohibited from being rented for any new lease, renewal, or tacit extension in the metropolitan area. This measure, stemming from the Climate and Resilience law, does not only concern new contracts: it also applies to ongoing leases upon their renewal.
For investors, the direct consequence is a forced arbitration. Keeping a property classified G without undertaking energy renovation works means accepting a legal rental vacancy. Selling this type of property implies a discount, as the buyer factors in the cost of works in their negotiation.
Obligations do not stop at individual housing. The collective EPC in co-ownership has been rolled out in phases between 2024 and 2026 depending on the size of the buildings, with an extension to small co-ownerships on January 1, 2026. Following the news on real estate on Live Infos keeps you informed about these regulatory deadlines that modify the asset value of properties.
The multi-year work plan (PPPT) has become mandatory as of January 1, 2025, for all co-ownerships over 15 years old. This document projects the necessary works over ten years and their financing. It impacts the estimated charges and, by extension, the attractiveness of a unit in co-ownership.
Correction of real estate prices: where is the market
The year 2024 recorded a downward trend in prices in many French regions. This correction followed several years of sustained increases, fueled by historically low rates that had inflated households’ borrowing capacity.
The decline has not been uniform across the territory. Major metropolitan areas like Paris have experienced a more visible adjustment, while some medium-sized cities have fared better due to local demand driven by telecommuting and still accessible square meter prices.
The volume of transactions has also significantly decreased compared to previous years. This contraction in the number of sales reflects buyers’ wait-and-see attitude in the face of uncertainty regarding rates and a persistent gap between the prices listed by sellers and the actual budget of buyers.
Negotiation and maneuvering room for buyers
In this context, negotiation margins have widened. A property that remains online for several weeks without an offer sends a clear signal: the asking price is likely higher than what the market will accept.
Buyers with a solid personal contribution and a completed financing file have a concrete advantage. They can propose short completion times, which reassures sellers pressed by a time constraint (relocation, separation, inheritance).
Mortgage interest rates: the mechanics that condition every project
The mortgage interest rate remains the central variable of any acquisition. After a rapid rise between 2022 and the end of 2023, rates began a measured decline in 2024. This easing has restored some purchasing power to borrowers, without returning to pre-2022 levels.
Specifically, a household’s borrowing capacity varies by several tens of thousands of euros between a rate of 4% and a rate of 3%. This differential is enough to make a project viable or exclude it, especially in tight areas where the price per square meter remains high.
- Compare offers from several banking institutions before signing, as rate differences between banks can reach several tenths of a point for the same borrower profile.
- Check the applicable usury rate at the time of assembling the file, as it sets the legal ceiling for the total cost of credit (including interest, insurance, guarantee fees).
- Anticipate the cost of borrower insurance, which represents a significant part of the total loan cost and can be renegotiated each year under the Lemoine law.
Energy renovation: the budget item that has become strategic
Energy renovation is no longer an optional choice for landlords. The rental ban timeline by EPC class is progressing: after G in 2025, properties classified F will be affected by 2028, followed by E in 2034.
This regulatory pressure creates two distinct segments in the market:
- Properties already renovated (classes A to D), which retain their rental and asset value.
- Thermal sieves (classes F and G), whose purchase price decreases but require a sometimes heavy renovation budget, especially in older buildings where external insulation is constrained by urban planning rules.
- Tourist rentals, subject since the Le Meur law of November 19, 2024, to a distinct EPC regime, which modifies profitability calculations for seasonal rentals.
Estimating the real cost before buying a thermal sieve
Buying a poorly rated property on the EPC can represent an opportunity if the acquisition price genuinely incorporates the cost of bringing it up to standard. An energy audit before purchase allows for quantifying priority works and avoiding unpleasant surprises once the compromise is signed.
A common pitfall is underestimating the works by relying solely on the EPC, which remains a standardized diagnosis. The energy audit, more detailed, identifies specific items (attic insulation, heating system replacement, ventilation) and their real impact on the final rating.
The real estate market in 2024 and beyond is viewed through three simultaneous lenses: the cost of credit, the level of local prices, and the energy compliance of the property. Neglecting any of these dimensions exposes one to additional costs or a loss of value that market conditions will not compensate for in the short term.
