One in Ten French Property Deals Falls Through

One in ten property deals in France is falling through due to mortgage rejections and declining purchasing power, The Connexion reports, citing data from real estate agency Foncia. Over the year, the number of cancellations after the signing of preliminary agreements increased by 11%, while the number of transactions in the existing property market declined by 7%.

The impact of unaffordable mortgages on France’s property market

Foncia CEO Zahir Keenoo said the current situation in France’s property market is unprecedented, with nothing similar having occurred in the company’s 54-year history. Around 10% of deals that have already reached the preliminary agreement stage ultimately fail to complete.

“One could say that one in ten deals falls through,” he explained. “Housing is becoming a barrier to social mobility and a factor undermining purchasing power. This creates difficulties at every stage of life.”

One of the reasons behind the increase in failed transactions is the reduced accessibility of mortgage lending. Buyers are facing stricter requirements from banks and are not always able to secure the financing needed to complete purchases.

France has a rule limiting monthly mortgage repayments to 35% of a borrower’s income. Banks can make exceptions only for a limited number of clients, but economic uncertainty has made lenders more cautious.

Rising interest rates have also significantly reduced buyers’ purchasing capacity. In 2021, when mortgage rates were around 1.05%, a monthly payment of €1,000 allowed buyers to obtain a loan of approximately €216,400. In 2026, with rates at 3.25%, the same payment corresponds to borrowing capacity of around €176,300.

Jordan Frarier, president of Foncia’s rental and transaction division, said demand for property remains, but many potential buyers are delaying their final decisions.

“Property viewings are taking place, people have plans, but the final decision is not being made. This is not a problem of supply or demand; it is a problem of confidence,” he said.

Lack of supply in France’s rental market

France is also facing a serious shortage of rental properties. According to Zahir Keenoo, the rental market crisis is structural, deep-rooted and long-lasting.

Since the beginning of 2026, Foncia has received 225,000 applications from potential tenants who passed the company’s preliminary screening process. This is 30% higher than during the same period in 2025. However, the company manages only 8,400 rental properties across France, including just 70 in Paris.

In the country’s largest cities, available rental supply remains extremely limited. In Paris, Bordeaux and Lyon, only around 1.5% of Foncia’s rental portfolio is available. The number of available properties has also declined in other major cities: by 6.7% in Toulouse, 11.8% in Marseille and 22.4% in Nice.

Low tenant mobility is adding further pressure. The number of notices from tenants planning to leave properties managed by Foncia has fallen by 7% since the beginning of the year, further limiting available options for new renters.

At the same time, some medium-sized cities are seeing the opposite trend. In Limoges, Grenoble and Poitiers, rental supply is increasing as lower property prices encourage investors to adopt a buy-to-rent strategy.

The impact of energy efficiency requirements and tax changes

Government energy efficiency measures have become one of the factors reducing rental supply. New regulations have removed properties with poor energy performance ratings from the market, as owners are unable or unwilling to carry out the required upgrades.

Zahir Keenoo noted that many property owners are reluctant to invest in costly renovations.

“Contrary to popular belief, many property owners in France are retirees who do not have the funds to carry out renovations and therefore prefer to remove their properties from the rental market,” he said.

Another factor has been the end of the Pinel scheme, which encouraged private investment in rental housing. According to Foncia, the new Jeanbrun scheme has so far failed to replace the previous support mechanism: none of the 9,000 new landlords added to Foncia’s portfolio in the first half of 2026 used the programme.

As a result, a combination of restrictions on landlords, rising maintenance costs and changes to tax incentives continues to reduce rental supply.

Views from other market experts

Loïc Cantin, president of France’s National Federation of Real Estate (Fnaim), linked buyers’ caution partly to the consequences of the conflict in the Middle East. Rising fuel costs, inflation and higher energy bills are encouraging households to be more cautious about major purchases.

In June, Fnaim reported that the number of property sales had declined by 17,000 over the previous two months. However, property prices have remained largely stable. Fnaim estimates the average property price in France at €2,994 per square metre, down 0.1% from the previous year. The organisation expects the number of property transactions to fall by 5% in 2026 to around 900,000. This would bring sales volumes close to levels recorded during the post-pandemic downturn.

Real estate agency Century 21 France also highlighted challenges in its mid-year report, noting that the average time required to complete a property sale has increased to 105 days, six days longer than a year earlier. Notaires de France, meanwhile, considers the situation relatively stable but highlights the market’s ongoing vulnerability.

Analysts at International Investment note that France’s property market continues to face pressure from high interest rates, limited mortgage accessibility and a shortage of rental supply. The situation remains challenging for property owners, while future market developments will depend on economic and political changes.