The French and the private property rental market

How has market turbulence impacted French people’s real estate projects?

Conditions in the French housing market were more favorable to real estate projects in 2025 than in 2024. And this is true even if we discount unreasonable expectations about acceptable price levels entertained by both sellers and buyers alike. Buyers’ preferences have chiefly favored the existing housing market, where the supply of properties is showing slow signs of recovery. The growing shift in transaction volumes away from the Greater Paris region towards the provinces has received further confirmation since the beginning of the year, mirrored by similar trends in prices. The general situation is characterized nonetheless by contrasting dynamics with a sluggish recovery for certain sectors, a glimmer of hope for others, and persistent difficulties for the rest.

Timid signs of recovery have emerged in the existing housing market since it bottomed out in the autumn of 2024. Transactions, however, have lost steam slightly since May. This loss of momentum is likely due to political and fiscal uncertainty and to an increase in property transfer taxes⁽¹⁾. Despite the upturn in activities overall, price trends over the last six months suggest a market where tensions between supply and demand remain moderate. While the market correction is well behind us from a long-term perspective, the recovery has been more modest when looked at from the vantage point of one year. The upturn also looks stronger in the provinces and for apartments than it does in the Greater Paris region or for houses. The overall situation is nevertheless showing signs of improvement with prices rising in nearly two out of three markets, compared with only half of them six months ago.

929,000 The number of transactions carried out in the space of one year.

The new-build market has been enjoying a rebound for the past several months. The recovery in housing permits has been quite strong (+28% from April to September year-on-year) and building starts are following suit albeit at a more moderate pace (+9%). Volumes, however, remain at very low levels. By type of use, new home ownership and ‘intermediate rentals’ (regulated rental properties for households with modest incomes) are the principal sectors driving this recovery (+13% and +9% respectively). By sub-market, two contrasting situations coexist:

Real estate development could reach a historic low for the third year in succession, falling nearly 30% below the level seen in the 2018-2022 period. Demand from individuals is declining for the fourth year in a row. At the regional level, the opposing dynamics of transactions and prices point to a disconnect between supply and demand,
The production of single-family homes has seen a clear recovery over the past six months (+20% compared to the previous six months), benefiting from the expansion of zero-interest loans since April 1, 2025.

Are real estate markets heading towards a greater decoupling between new-build and existing properties in 2026?

The current stability in interest rates could give way to a slight increase by the end of the year, expected to continue into 2026. Aware of the deteriorating economic and financial environment, more French people now consider an interest rate above 3% to be acceptable. What is more, with the stabilization of key interest rates and the finalization of the adjustment of its balance sheet size, the European Central Bank’s monetary policy is expected to cease exerting downward pressure on financing costs at this time horizon. In this context, the rise in 10-year OATs (long-term government bonds issued by the French treasury) should be partially reflected in mortgage rates, owing to the structure of loan production more in favor of first-time buyers. This atypical configuration is expected to continue next year, taking interest rates on new home loans to an average of 3.35%.

Housing sales are expected to follow varied trajectories. Since early 2024, buyers have considered the timing slightly less unfavorable for buying than sellers have considered the timing right for selling. At the same time, the upturn in transactions in favor of existing homes is based on a slight increase in the use of credit. By 2026, the deteriorating budgetary and financial environment (rising interest rates combined with rising unemployment) is expected to weigh down on real estate activities, in the existing home market in particular. The recovery in new-build home sales is only expected to be visible in the single-family home segment while still remaining modest compared to the volumes recorded before 2023. Without support measures for rental investment, sales from real estate development are expected to remain at their current low level.

1 million The number of transactions expected for 2026 (-2% year-on-year).

Against this backdrop of a slight decline in transactions and significant uncertainty undermining French confidence, price dynamics in the existing housing market are expected to be subdued: +0.7% in 2026 after +1.0% in 2025. The prospects for price increases remain limited in the opinion of both buyers and sellers alike.

In terms of mortgage lending, new production has stabilized in recent months. First-time buyers represent the largest and most dynamic segment of this market. In 2025, the home loan market rebounded more strongly over the year than other real estate variables such as prices and the number of transactions: +29%.

In 2026, the less buoyant fiscal and financial environment is expected to have a negative impact on households’ decisions to purchase homes and, as a corollary, on the use of credit, where volumes are expected to decline slightly.

Private landlords: what has changed over the last three years?

While investor profiles have changed little since 2022, the regulatory, budgetary, and financial environment for rental investments has deteriorated significantly. The population of private landlords represents 11% of French people aged 18 and over. They are more urban, more affluent, more likely to live as a couple, and own their own homes unburdened by any outstanding loans (53% vs. 35% of French people).

23% The proportion of French people interested in becoming private landlords.

What is the situation regarding French people who are not currently private landlords but are interested in becoming one? They represented 23% of French people in 2025 (−1 point compared to 2022). The proportion of 30-49 year olds has increased significantly within this population, rising from 39% in 2022 to 45% in 2025. While they are mostly senior white-collar workers or skilled tradespeople (41%), the proportion of workers/employees wanting to invest in rental property has increased (38% vs. 33% in 2022).

Surveying respondents at three-year intervals, the BPCE L’Observatoire economists have identified four key findings.

1 -The nature and strategy of investment is changing. More private landlords than in 2022 are multi-property owners (41% vs. 38%). They say that they own more apartments than in 2022 (70% vs. 64%) and, overall, have been renting for longer (32% say they have been renting their property for more than 10 years vs. 24% in 2022). Unfurnished rentals (56%) remain the main type of rental (−3 points vs. 2022), ahead of furnished rentals (30%) and seasonal rentals (14%, +2 points vs. 2022).
2 -More private landlords now want to divest than invest (25% vs. 23% respectively), primarily owing to the heavy tax burden. In 2022, 30% wanted to continue investing, compared to 18% who were considering divesting. Certain profiles of private landlords stand out, particularly in terms of their five-year strategy. Those aged 65 and over are more likely to want to maintain their rental investment as it stands (56% vs. 40% of all private landlords). Those aged 75 and over are more likely to want to divest (36% vs. 25% of all private landlords).
In addition to the heavy tax burden on rents (32%), landlords cite other reasons for divesting, such as the complexity of property management (25%) and the need to carry out work owing to energy efficiency ratings (20%).
3 -For 45% of private landlords, rental profitability is the decisive criterion, far ahead of other considerations, even though it has fallen slightly in the ranking of motivations over the past three years (−5 points). At the same time, the desire to supplement retirement income has increased (+5 points), as has the possibility of having a property to pass on to a child or relative (+7 points).
Among the obstacles to investing in rental real estate, the difficulties a landlord might face with a tenant (52%) come out on top ahead of tax increases (41%) and the need to finance renovations (33%). Over three years, more owners are reporting concerns about the possibility of renting due to energy performance diagnosis standards, with an increase of 4 percentage points to 21%.
4 -The expression of some of these concerns may explain an increase in the number of owners entrusting the management of their property to a professional in 2025 (+9 points compared to 2022). In addition, landlords report a decline in difficulties in finding tenants over this period, as well as a decrease in significant damage to rented accommodation (−4 to −5 points since 2022).

(1)Taxes chiefly levied by local authorities and the French State when real estate is transferred from one person to another in exchange for a sum of money.

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