The French real estate market has been undergoing a restructuring phase for over two years. After a significant decline in transaction volumes and a price correction that began at the end of 2023, the signals observed in early 2025 hinted at a recovery.
Recent geopolitical tensions, particularly the conflict in Iran and the rise in crude oil prices, have reshuffled the cards in just a few weeks. Understanding what is happening in the real estate market today requires looking beyond the headlines to examine the mechanisms that truly structure prices, demand, and supply.
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Thermal sieves and the rental market: the constraint reshaping supply
The Climate and Resilience Law has established a timeline for the progressive banning of rentals for properties classified F and G in terms of energy performance diagnosis. Several thresholds have already been crossed, and the upcoming ones continue to weigh on landlords’ decisions.
According to analyses from IGEDD updated in 2026, highly energy-consuming properties are depreciating more sharply than the rest of the market upon resale. This is not a marginal phenomenon: in certain tight areas, the rental supply is declining directly due to these bans.
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Small landlords, often owning only one unit, face a binary choice: undertake heavy renovation work or sell. This flow of forced sales feeds a market segment where buyers have increased negotiating power, provided they are willing to accept a property that requires work. To keep track of these developments and their consequences on prices, the site pole-finance.fr dedicated to real estate aggregates useful data on the French real estate situation.
First-time buyers vs. investors: who is buying in 2026
The structure of demand has changed significantly. The BPCE Group observes that, in 2025 and early 2026, first-time buyers have become the most active buyers in the market, with a financing level higher than that of the pre-Covid period.
Rental investors, on the other hand, remain on the sidelines. The cost of credit, stricter lending criteria, and the gradual end of tax support schemes for rental investment have reduced their appetite. Second-time buyers are also hindered, often by a scissors effect between the resale price of their current property (declining) and the acquisition cost of the next one.
This restructuring has direct consequences on the types of properties that sell quickly. “Turnkey” homes, with good energy ratings and suitable for primary residence, sell faster than others. In contrast, large properties requiring work or investment-oriented properties struggle to find buyers at the listed price.
What this means for sellers
A seller targeting first-time buyers must understand that these buyers often have limited down payments and borrowing capacity constrained by HCSF rules. The listed price must align with the financeable budget, not the estimated value of the property. Properties priced above the financing threshold for this category of buyers stagnate in listings.
Mortgage rates: an unstable driver
The easing of rates that began in mid-2024 contributed to the resurgence of transactions observed in early 2025. Financing conditions have improved significantly compared to the peak in 2023. However, this improvement remains fragile.
The international context directly impacts long-term European rates. The rise in oil prices fuels inflationary pressures in the eurozone, limiting the European Central Bank’s room for monetary easing.
- Inflation related to raw materials hampers the decline of key rates and mechanically increases the cost of mortgage credit
- Lending criteria remain governed by the HCSF: a debt-to-income ratio capped at 35% of income and a maximum duration of 25 years
- The purchasing power of households in the real estate market, although improved compared to 2023, remains lower than during the 2019-2021 period
The available data does not allow for a conclusion on the trajectory of rates for the second half of 2026. Field feedback varies on this point: some brokers observe a slight tightening, while others see stability.
Old vs. new: two markets, two pricing logics
The divergence between the old and new markets has intensified. In the old market, prices have undergone a significant correction since 2023, with marked differences depending on the regions. Paris and major metropolitan areas have seen their prices stabilize, or even slightly rise in certain districts or well-served neighborhoods.
The new market, on the other hand, operates under different constraints. Construction costs remain high, driven by environmental standards (RE2020) and material prices. The production of new housing does not meet demand in tight areas, which keeps prices at high levels despite a declining sales volume.
Depreciation of energy-consuming properties in the old market
The DPE rating has become a full-fledged negotiation criterion. A property classified F or G now sells at a significant discount compared to an equivalent property classified C or D. This discount varies greatly depending on local markets, but the trend is uniform across the territory.
For a buyer, acquiring an energy-consuming property at a discounted price and then financing its renovation can be a relevant strategy, provided the cost of the work is accurately estimated before committing. The DPE now influences the sale price as much as location or size.
Regional disparities: a real estate market with multiple speeds
Talking about “the” French real estate market in the singular is misleading. The dynamics observed in Paris, in regional metropolises, in medium-sized cities, and in deep rural areas have almost nothing in common.
Prestige real estate illustrates this fragmentation. Vacation areas capture an increasing share of high-end transactions, while the capital has ceded its position as a leader in this segment.
In medium-sized cities, the recovery remains timid. The supply is often abundant, sales timelines are long, and local demand is limited by less dynamic employment pools. Price per square meter gaps between metropolises and medium-sized cities continue to widen.
The real estate market of 2026 rewards precision: precision in pricing, energy labels, and buyer targeting. Sellers who adjust their strategy to these new realities find buyers. Others wait.