Paris Property Prices Begin to Rise After Long Decline

Paris property prices, which had steadily fallen by around 10% since the summer of 2020 due to the impact of the COVID-19 pandemic, are now showing signs of growth in early 2025, according to Paris Property Group. Experts expect a significant shift in market dynamics.

At the end of 2024, home prices had fallen across many major French cities, according to the IAD real estate network. In Paris, the average price for a resale apartment in December was €6,934 per square meter — 5% lower than the previous year. Detached homes also saw a 5.1% decline, down to €4,813. The biggest price drops were recorded in areas further from the city center. Meanwhile, closer suburbs such as Nanterre and Saint-Denis remained stable at €5,000–5,200 per sq.m.

Analysts had predicted minor corrections over the coming months, but changes were already observed by January 2025. Although still modest — +0.7% over three months and +0.5% year-on-year — this uptick could signal the end of the buyer’s market that has prevailed in recent years.

Real estate professionals report increased activity, largely driven by falling interest rates. Banks are now offering mortgages at around 3.5%, down from previous highs above 4%, creating a favorable environment for borrowers.

There’s been a significant increase in property viewings and inquiries. Negotiation margins and discount sizes have shrunk from 5–10% to 3–6%, while the pace of transactions has also accelerated. The recovery is most evident in lower-priced districts, and if this trend continues, the price gap between locations may shrink — rather than prices rising uniformly across Paris.

According to Global Property Guide, gross rental yields for residential properties in France average 4.70%. Marseille leads with 5.17%, followed by Montpellier (4.84%) and Paris (4.83%), with the lowest in Toulouse (4.39%).

Analysts from FNAIM have flagged compliance with energy efficiency standards as a growing issue. As of January 2025, homes rated “G” in the energy performance certificate (DPE) can no longer be rented, affecting about 567,000 properties. The end of France’s tax incentive schemes for rental investment and the rise of short-term rentals across the country are also likely to impact the market going forward.

FNAIM forecasts mild recovery: prices should stabilize in the first half of 2025 and increase by 1% annually in the second half. Much will depend on interest rate developments and financing conditions, which are expected to improve in 2025, boosting buyer affordability. In addition, geopolitical events and domestic housing policy will shape the future trajectory.

FNAIM president Loïc Cantin emphasized that 2024 was a turning point for the housing market, marked by major changes but also signs of stabilization. “Real estate professionals must now prepare for gradual recovery, which will depend on interest rate trends and government support for housing construction,” he stated.

Earlier, Fitch Ratings revised France’s credit outlook from “stable” to “negative,” citing rising fiscal policy risks and an increasing public debt ratio, which is projected to reach 118.5% of GDP by 2028. The agency warned that planned consolidation measures — such as higher corporate taxes, delayed pension indexation, and healthcare spending cuts — could face resistance due to France’s politically fragmented parliament.

Moody’s also downgraded France’s credit rating in December 2024 from stable Aa2 to negative Aa3, citing political uncertainty following a government reshuffle.