How is the purchasing power of the French in new real estate evolving?

With its partner Trouver-un-logement-neuf.com, Empruntis offers an analysis of the evolution of mortgage rates and prices for new builds, with the aim of assessing the purchasing power of the French in this market.

Thanks to the reduction in rates, reinforced by falling prices in 5 out of 10 major cities, the purchasing power of French people in new real estate continues to increase.

Buyers hold all the cards!

The fall in prices of new apartments is coming to an end

After more than a year of widespread declines across France, the decline in new property prices appears to be reaching its final stages. Although five major cities continue to post declining prices, the price reductions in the average cost of a new three-room apartment, the benchmark size in real estate development, are less than in the two previous surveys.

Thus, in detail, over the last six months, the prices of two-bedroom apartments in the ten largest French cities reveal contrasting dynamics. Paris recorded a sharp increase of 3%, returning to the levels of a year ago, a sign of a market in the process of normalizing. Nice remains a unique market where prices continue to gradually increase, up 26%, without having really experienced a correction before. Lyon, meanwhile, remains stable at around €1,07, despite a decline of 400.000% over the last six months.

Lille surprised with an 8,25% increase over six months, but still recorded a decline over one year, which could attract investor interest at a time of ambitious industrial projects in the region. Bordeaux saw a 4,16% increase but remains below its past peaks. In Strasbourg, the recovery seems underway (+3,93%), while Nantes remains in a depressed market where developers continue to make efforts, with the average price of a two-bedroom apartment down 3%. Marseille remains stable and still affordable, but beware of significant price differences depending on the neighborhood and arrondissement. Montpellier continues to slide slowly (-2,39%), and Toulouse confirms its position as the most affordable city, with an average price below €0,99, down 300.000%.

For Céline Coletto, spokesperson for Find-un-logement-neuf.com: "We are likely entering a phase of reversal in the new real estate market in terms of price developments. After months of corrections, developers have purged most of the new programs that no longer corresponded to household solvency and prices should start to rise again in the coming months due to inflation, new regulatory and environmental standards such as the new 2025 threshold of the RE 2020... hence the interest in taking advantage of the price drops that continue."

Lower rates encourage access to property and boost the real estate market

Interest rates will continue to decline in spring 2025, strengthening the attractiveness of the real estate market. Since November 2024, the average rate decline in major French cities has reached 20 basis points, allowing more households to access homeownership.

In May 2025, the average 20-year rate (excluding insurance) fluctuates between 3,30% and 3,40% depending on the cities studied. This favorable trend is explained in particular by the successive decisions of the ECB, which has made six cuts to its key interest rates since November 2024. This accommodative monetary policy has had a direct impact on the mortgage market, facilitating access to financing and supporting economic activity in a context of recovery.

In this buoyant environment, banks remain aggressive and prioritize winning new customers. The new-build market is benefiting from strong support from banking institutions, which are leveraging several levers: extending the zero-interest loan (PTZ) to the entire country for new homes, applying a discount for favorable energy performance certificates (DPEs), extending the average loan term, and specific offers for first-time buyers, sometimes including a zero-interest package.

French property purchasing power continues to rise

Of the ten largest cities in France, six cities have recorded a decrease in the monthly budget allocated to the purchase of a new three-room apartment: Lyon, Toulouse, Nantes, Montpellier, Marseille and Nice.

In detail, the monthly payments (excluding insurance) over 20 years range between €1.671 in Toulouse and €4.973 in Paris.

In order of the largest gains in purchasing power in six months:

• Lyon: - 4% or a monthly payment of €2.248
• Toulouse: - 4% or a monthly payment of €1.671
• Nantes: - 3% or a monthly payment of €1.777
• Montpellier: - 3%, i.e. a monthly payment of €1.727
• Marseille: - 2%, i.e. a monthly payment of €1.780
• Nice: - 1% or a monthly payment of €2.507
• Strasbourg: + 2% or a monthly payment of €1.753
• Bordeaux: + 3% or a monthly payment of €1.801
• Lille: + 8% or a monthly payment of €1.873
• Paris: + 33% or a monthly payment of €4.973

What are the short-term prospects?

"Since the beginning of the year, the real estate market has shown clear signs of stabilization. Prices are calming down, interest rates are falling, and long-delayed projects are once again being able to come to fruition.

With controlled inflation, more affordable rates, and support from banks and public policies, the sector is now regaining a welcome sense of stability, and conditions are once again becoming favorable for purchasing. Whether for living or investing, this spring marks the return of a climate of confidence for project leaders.

Finally, faced with the persistent shortage of new housing, real estate developers are adapting and offering subsidized financing schemes, facilitating homeownership. Whether it's deferred payments, exceptional discounts, or personalized support, the goal is clear: to remove the remaining barriers to purchasing to enable everyone to realize their real estate project.

This spring marks a promising transition, driven by an unprecedented alignment between public policy, banking support, and the mobilization of industry players. A climate conducive to recovery, in which each future buyer can once again look to the future with confidence,” says Caroline Pasquereau, Director of Strategic Marketing and Communications at Groupe Empruntis.

For Céline Coletto from Trouver-un-logement-neuf.com: "Even if prices are rising again in some major cities, there is good news: the purchasing power of the French to buy new housing remains largely favorable in spring 2025. More than ever, now is the time to take advantage of it because a lack of supply is looming with the approach of the municipal elections and the cyclical drop in prices cannot last. Thanks to the expanded PTZ for housing, the new LLI for investment, home buyers and investors have every interest in turning to new housing to build up their assets now."

Illustrative image of the article via Depositphotos.com.