French Property Market Rebounds in 2025 – But Will Rising Rates Stall the Recovery in 2026?

A Year of Real Estate Revival in France

After three turbulent years of declining prices and cautious buyers, France’s housing market finally regained momentum in 2025. According to the property network Century 21, sales of existing homes surged by more than 11% year-on-year — a clear sign that demand has returned.

Prices also stabilized after a long downturn. The average price per square metre for houses reached €2,510, while apartments averaged €4,192, both up by around 1.4%. In major cities, Paris held steady at roughly €9,540/m², while Lyon recorded a healthy 2.5% increase.

“We can say the crisis is behind us,” said Charles Marinakis, president of Century 21. “But are we free from risk? Not entirely.”

What’s Driving the Recovery?

Several factors helped fuel the rebound:

Lower interest rates in 2025: Mortgage rates stabilized around 3.25% on 20-year loans, encouraging buyers back into the market.
Improving buyer confidence: After years of hesitation, many households took advantage of steady financing conditions.
Stabilized prices: Sellers adjusted expectations, leading to quicker transactions and renewed market movement.
Urban resilience: Metropolitan areas like Paris, Lyon, and Bordeaux saw stronger price stability compared to rural zones.

Together, these elements rekindled confidence and boosted transaction volumes to over 921,000 homes sold in 2025 — a level not seen since before the downturn.

2026 Outlook: Headwinds on the Horizon

Despite the positive momentum, early signs in 2026 suggest the recovery could face turbulence. Mortgage brokers such as Cafpi report that average loan rates climbed slightly to 3.42% in January 2026—up from 3.25% a month earlier—as financing costs rise across Europe.

The uncertainty stems partly from France’s political and fiscal instability. The French government’s borrowing rates (OAT 10-year yield) exceeded 3.6% in late December, a reflection of market tension and cautious investor sentiment.

“Our optimism remains measured, given the ongoing political, economic, and geopolitical uncertainties,” noted Priscille Caignault of the French Superior Council of Notaries.

Forecasts: Growth Slowing, but No Crisis Ahead

Experts offer mixed predictions for 2026:

SeLoger and Meilleurs Agents foresee between 960,000–980,000 transactions, with prices rising 2–3%.
The BPCE Observatory is more cautious, expecting modest growth of only 0.7% and possibly fewer transactions.
Unemployment and budgetary pressures could limit household purchasing power, slowing demand later in the year.

Even so, there’s no sign of a major crash ahead. Instead, analysts expect a plateau — with stable prices and steady but slower activity.

What It Means for Buyers and Sellers

For buyers, early 2026 may still be a good moment to act before rates climb further and tighten affordability. Fixed-rate mortgages remain lower than historical averages, and supply has improved in most regions.

For sellers, the market rebound offers renewed opportunities — provided pricing stays realistic. Well-located properties, particularly in urban zones near transport and amenities, continue to attract strong interest.

Final Thoughts

The French property market in 2025 proved more resilient than many expected. With prices stabilizing and transactions rebounding, confidence has returned — albeit cautiously.

However, 2026 will test this fragile balance as interest rates rise and political uncertainty persists. Whether this marks a steady new normal or a temporary uptick will depend on France’s broader economic stability.