In February 2025, the French real estate market is evolving in a relatively favorable stabilization context after a period of significant corrections in 2024. The decline in interest rates is stimulating demand, encouraging a gradual recovery of mortgage lending and transactions.
Between price adjustments, rental market developments, and investment opportunities, what are the key factors shaping real estate in France this year? Here’s an analysis of current trends and perspectives to better understand the challenges and opportunities in the real estate sector in February 2025 with Optimhome.
Recent Evolution of the French Real Estate Market
In February 2025, the French real estate market presents mixed trends depending on the region. After a significant correction in 2023 and 2024, prices are showing signs of stabilization, while transaction volumes are on the rise again.
Real Estate Price Variations in February 2025
In Q4 2024, prices of older homes declined by 0.9%, significantly less than in April 2024, when the decrease reached 4.6% (Journal de l’Agence, 2025). This slowdown is due to a renewed demand driven by improved financing conditions.
However, regional disparities and local specificities must be taken into account:
- Apartment prices increased:
- In 49% of provincial cities
- In 16% of cities in Île-de-France
- Paris and Lyon remain stable
- Bordeaux and Toulouse experience a slight decline
(Journal de l’Agence, 2025)
The evolution of the local market often depends on economic dynamics and rental demand.
Analysis of Recent Transaction Volumes
The number of real estate transactions increased by 8.7% in Q4 2024, contrasting with the 31.3% drop in 2023 (Journal de l’Agence, 2025). This recovery is supported by more attractive mortgage rates.
Although the market has not yet reached the record levels of 2021-2022, it is more dynamic than in 2023 and is expected to outperform 2024. Rental investment is particularly sought after in suburban areas and secondary cities, where prices are more affordable and rental profitability remains attractive.
Factors Influencing Market Recovery in February 2025
In February 2025, the combination of favorable interest rates and government incentives is boosting buyers' purchasing power and revitalizing the French real estate market at the beginning of the year.
Positive Impact of the Continuous Decline in Interest Rates on Home Purchases
The continuous decline in mortgage rates in February 2025 is significantly enhancing buyers’ purchasing power. In January 2025, the average mortgage rates were:
- 3.00% for 10 years
- 3.25% for 15 years
- 3.31% for 20 years
- 3.40% for 25 years
(Source: CAFPI, 2025)
This rate reduction improves borrowing conditions, thereby increasing households’ real estate purchasing power.
Influence of Recent Government Policies
Recent and upcoming government measures on housing also have a significant impact on the real estate market:
- The 2025 Finance Bill includes an additional €100 million in state financial support for mayors promoting housing development (Journal de l’Agence, 2025).
- The extension of the Zero-Interest Loan (PTZ) for new housing across the entire country aims to facilitate homeownership for low-income households (Journal de l’Agence, 2025).
- Additionally, new habitation criteria for rental properties, including the ban on renting properties with an energy performance rating of G, are reshaping the rental and investment markets.
These measures play a crucial role in sustaining demand and stimulating market activity in February 2025.
The Residential Real Estate Market in February 2025
In France, the residential real estate market in February 2025 is marked by a recovery in transactions and sustained rental demand, although regional disparities and regulatory challenges persist.
Market Conditions for Buying and Selling
Q4 2024 saw a significant rebound in sales of older homes, with an 8.7% increase compared to the previous year, contrasting with a 31.3% decline in 2023. This trend is partly due to continuously declining mortgage rates, encouraging property purchases.
First-time buyers particularly benefit from these favorable conditions, facilitating their access to homeownership. Meanwhile, investors are regaining interest, especially in areas with strong rental demand. The residential real estate market trends are therefore positive for both buyers and sellers.
Focus on Rental and the Rental Market
The French rental market remains under pressure in February 2025, particularly in high-demand urban areas, where rental demand exceeds available supply. This situation puts upward pressure on rents, making housing access more difficult for certain households.
Additionally, landlords must comply with evolving regulations, including rent control laws and energy efficiency requirements, with a ban on renting energy-inefficient properties.
Real Estate Investment Market in February 2025
In February 2025, real estate investment in France presents diverse opportunities, both in the rental sector and in choosing between new and old properties.
What Are the Best Rental Investment Opportunities in 2025?
Major cities like Paris, Lyon, and Marseille remain secure investment choices, offering strong demand and continuous property value appreciation.
However, regional cities and mid-sized towns stand out for their economic and demographic dynamism, offering attractive rental yields.
To optimize rental profitability, investors can use tax schemes such as:
- The LMNP (Non-Professional Furnished Rental) scheme
- The Loc'Avantages program, which offers tax reductions for affordable rental rates
The Impact of New and Old Properties on Investment
Investing in new properties offers advantages such as reduced notary fees, better energy performance, and builder warranties. These benefits justify higher rents and attract tenants looking for quality housing.
Conversely, older properties often have lower purchase prices, potentially leading to higher rental yields and capital gains after renovation. Additionally, some tax incentives encourage renovation of older properties, offering fiscal benefits.
Real Estate Market Forecasts for 2025
In February 2025, the French real estate market offers promising prospects for the year ahead, following a challenging 2024.
What Are the Expected Real Estate Trends for the Coming Months?
Projections for 2025 indicate an initial price drop, followed by a price increase in the second half of the year. This trend is supported by the ongoing decline in interest rates, which could drop below 3% for 20-year loans (CAFPI, 2025). However, a full market recovery is expected by late 2025, with a gradual rise in transactions and price stabilization.
Is February 2025 a Good Time to Buy or Sell?
- For buyers, lower interest rates improve borrowing capacity, making property acquisition more accessible. Additionally, the early-year price decline might be a good opportunity to buy before prices rise again.
- For sellers, the current rebound in demand can favor negotiations as buyers return to the market.
Conclusion: Promising Signals for Q1 2025!
In February 2025, the French real estate market shows encouraging signs after a period of adjustments and downturns in 2023 and 2024:
- Price stabilization after a significant correction
- Rebound in transactions (+8.7% in Q4 2024)
- Lower interest rates, improving borrowing conditions
- Tight rental market, with high demand
- Attractive investment opportunities through tax incentives
Whether you want to buy, sell, or invest, expert guidance is essential. Contact an Optimhome advisor for personalized support to make the most of the 2025 real estate market.
Author: Fabrice DOBROWOLSKI, Director of Network Development, Optimhome
