The real estate market in France is going through a period of mixed signals. On one hand, transaction volumes are rising again compared to the lows observed in recent years. On the other hand, mortgage lending is becoming complicated again: the production of loans and the number of credits granted are declining year-on-year, while interest rates are rising.
Understanding these movements requires looking beyond the headlines about prices per square meter.
Mortgage lending in France: recovery hindered by interest rates
When mortgage interest rates rise, households’ borrowing capacity decreases mechanically. With the same monthly payment, the amount a bank is willing to lend today is lower than what was granted a year ago.
The most common workaround is to extend the loan term. This extension allows for a manageable monthly payment, but it inflates the total cost of the loan paid over the entire repayment period.
The effect on the market is paradoxical: prices remain stable because buyers are still technically solvent, even though their real purchasing power has decreased. To follow the news on Ventes Immo, this tension between rates and durations has been the common thread in the market for several months.
First-time buyers without significant savings are the first to feel this tightening. On the investors’ side, strategies vary: some are postponing their projects, while others are taking advantage of the situation to negotiate lower sale prices.
Energy Performance Certificate and electrical coefficient: what changes for electrically heated homes
Have you noticed that a property rated F or G on the Energy Performance Certificate sells at a significant discount? The energy performance diagnosis now directly impacts the sale price. However, a regulatory change could alter the label of certain properties without any work being done.
The conversion coefficient for electricity is set to change from 1.9 to 1.7 on January 1, 2027. In practical terms, an electrically heated home will show a “lower” consumption on paper, thanks to a more favorable calculation method. An apartment rated E could thus shift to D.
A public tool already allows for estimating this label change based on the existing Energy Performance Certificate. Only the official certificate from ADEME makes the new label enforceable. Until it is obtained, the old rating is valid for any sale or rental.
Concrete impact on transactions
A seller of a poorly rated electric property may sometimes benefit from waiting a few months. Gaining a letter upgrade on the Energy Performance Certificate can reduce the discount applied by buyers.
The reverse reasoning applies for an informed buyer: negotiating now for a property rated E heated by electricity could represent an opportunity, if the property moves to D after January 2027.
MaPrimeRénov’ refocused: what works are still financed?
The MaPrimeRénov’ scheme has changed significantly in recent years. Its current logic prioritizes the decarbonization of heating. In mainland France, the “by gesture” pathway has been tightened, and several isolated works are no longer eligible, particularly certain types of insulation done alone.
The stated goal is to push homeowners towards extensive renovations rather than isolated interventions. Why this choice? Because a comprehensive renovation (combined insulation, heating, ventilation) produces significantly greater energy savings than a single gesture.
- Replacing carbon-based heating (oil, gas) with a heat pump or low-carbon equipment remains the core of the scheme
- Isolated insulation works, without changing heating, are much less well covered than before in the by gesture pathway
- Extensive renovations benefit from more generous aids but require support from an accredited operator
A landlord has a direct interest in anticipating these works. Properties rated G are gradually being banned from rental, the timeline is tightening, and there is no guarantee that current aids will be renewed at the same levels.
New lease models and rent control: the legal framework is tightening
The rental market is also experiencing regulatory adjustments. New lease models (unfurnished, furnished, shared housing with a single lease) include additional clauses regarding the occupation of the property and a resolutory clause in case of non-payment. These apply to contracts concluded or renewed from their effective date.
For a rental investor, the consequence is direct: contracts need to be updated. Using an old lease model exposes one to disputes in case of litigation.
Rent control in question
The rent control scheme, applied in several major cities including Paris, is at a pivotal moment. A recent report considers either its extension or its evolution towards a broader framework.
Investors in tight zones must incorporate this uncertainty into their profitability calculations. And rent control is not limited to the base rent: rent supplements, used to justify exceeding the ceiling, are subject to increasingly strict scrutiny.
Trends in the real estate market in France: prices and volumes to watch
Real estate prices are evolving very differently across territories. Paris shows a recovery in transaction volumes, while some medium-sized cities see their prices stagnate or decline slightly.
- Properties well-rated on the Energy Performance Certificate (A, B, C) sell faster and at better prices than thermal sieves, widening a value gap that continues to grow
- New builds remain under pressure: construction is struggling to recover after several years of crisis, limiting the available supply
- Transactions in the old market are gradually picking up but remain far from the record volumes observed a few years ago
The real estate market in 2026 rewards buyers who do their calculations: check the Energy Performance Certificate, anticipate the change in electrical coefficient, negotiate based on the works to be planned. Sellers poorly informed about energy regulations or eager to sell are losing ground in negotiations.
