French Real Estate Market Recovery in 2025: Trends, Drivers, and Outlook

Explore the positive recovery of the French real estate market in 2025, featuring rising sales volumes, stabilized mortgage rates, moderate price increases, regional contrasts, and outlook for buyers and investors.

In 2025, the French real estate market experienced a marked rebound after several years of subdued activity. According to major real estate networks such as Century 21 and Optimhome, transaction volumes increased significantly, with an estimated 850,000 to 875,000 property sales for the year—a substantial rise compared to 2024. This recovery has been most notable in the existing (resale) housing sector, which remains the market’s main driver.

The summer months of July and August 2025 saw a surge in sales, with figures rising by around 30% relative to the spring period. This upswing reflects renewed buyer confidence, supported by several favorable factors such as more reasonable pricing in some areas and a stabilization of mortgage interest rates. Shorter selling times have been reported especially in dynamic regional cities like Nantes, Bordeaux, and Lyon, as well as sought-after suburban zones around major urban centers.

The strong revival of buyer demand is particularly driven by younger buyers and first-time homebuyers, who have returned to the market thanks to more attractive borrowing conditions and government incentives aimed at facilitating property acquisition.

Attractive Mortgage Rates Fuel Demand

Mortgage interest rates have stabilized and slightly decreased in 2025, with average rates on 20-year loans hovering around 3.1%, down from over 4% in the previous year. This significant decrease has increased borrowing power for many households, helping to restore access to homeownership. As a result, property demand has increased by approximately 20% nationally compared to 2024.

This more favorable financing environment has rekindled the interest of both owner-occupiers and investors. First-time buyers and “project-minded” purchasers, often targeting relatively affordable apartments close to employment and transport hubs, benefit notably from these conditions and government programs such as renewal of the zero-interest loan scheme.

Moderate Price Increases with Regional Variations

Prices across France have started to rise moderately in response to the stronger demand, but the overall increase remains measured to avoid market overheating. On average, housing prices increased by approximately 2.7% for houses and 4.3% for apartments year over year in 2025. The national average price per square meter stands around €3,400, still slightly below the peak levels observed in 2022.

Significant regional disparities persist:

Paris remains the most expensive market with prices averaging about €9,600 per square meter.
Regional cities such as Bordeaux, Marseille, and Toulouse reported price rises between 1.5% and 3.2%.
Certain smaller cities like Dijon and coastal towns including Biarritz saw slight price declines due to local demand and supply dynamics.

The increasing gap between supply and demand in many areas suggests that price pressures could intensify in highly sought-after locations, raising concerns about affordability for some buyers.

Supply Constraints and Market Challenges

Despite growing demand, housing supply remains limited. The construction of new properties continues to be slow, exacerbated by rising costs and labor shortages in the building sector over recent years. This supply-demand imbalance is particularly felt in major urban and suburban areas, pushing prices upward and reducing the availability of homes that match buyer budgets.

Investors are becoming more selective, focusing on regions and properties with strong rental yields or good medium-term appreciation potential. The sluggish pace of new housing production reinforces the attractiveness of existing homes but also poses challenges for market balance.

Outlook for Buyers and Investors

Looking ahead through late 2025, the French real estate market is showing promising signs of consolidation and moderate recovery. Buyers are advised to act with caution but confidence, particularly first-time homebuyers who can capitalize on relatively low interest rates before potential future increases.

Investors and developers should monitor regional trends closely, as market dynamics vary widely across the country. Measures to support new housing construction and improve offer fluidity will be essential to prevent excessive price inflation and maintain long-term market stability.

This comprehensive overview of the French real estate market in 2025 highlights a recovery fueled by stable financing conditions and renewed buyer confidence amid ongoing supply constraints and regional contrasts. Both buyers and sellers face an environment of cautious optimism balanced by the need for vigilance to avoid market overheating.