Real estate market: 2025, a decisive year?

In this context, the real estate sector, already shaken by a drop in prices, environmental challenges and new work-related uses, finds itself at a turning point.

What dynamics will redefine the market this year? Several structuring trends are emerging, forcing industry players to rethink their strategies.

A residential market under pressure

In 2024, prices of existing homes continued to decline, recording a drop of 6,8% over one year[1]. A brutal adjustment, mainly caused by the rise in interest rates, which nevertheless reached its limits by stabilizing below 3,5%. If this correction offers a window of opportunity for investors, it highlights a major challenge: adapting the market to the new expectations of buyers while meeting the reinforced energy standards.

Offices in search of a new lease of life

Faced with the rise of teleworking, the office market is undergoing a profound transformation. In Île-de-France, the vacancy rate reached 10,2% at the end of 2024, with marked differences between Paris (4,8%) and the inner suburbs (19,7%). Companies are turning to modular, energy-efficient spaces that are adapted to the needs of hybrid work. The question is clear: will flexibility be enough to avoid a structural decline in the office market?

Regional growth: a double-edged dynamic

Far from the major cities, the regions have benefited from an unprecedented appeal during the pandemic, thanks to teleworking. However, this momentum seems to be running out of steam. In Nantes, Bordeaux and Lyon, property prices have fallen by 8,2%, 9,1% and 7,5% respectively since the start of 2024. Some households, attracted by a regional lifestyle, are now struggling to adapt and are starting to return to the big cities.

Business: reinvent yourself or disappear

With the rise of e-commerce, traditional retail spaces must reinvent themselves. It is no longer just a question of selling, but of offering engaging experiences: leisure, services, and digitalization are the key words of an ongoing transformation.

Investments: SCPIs between tension and adaptation

SCPIs, long seen as safe havens, are resisting the turbulence as best they can. With yields that can exceed 6% to 7%, they still attract investors. But the latter must face significant revisions in asset values, in an uncertain economic context.

The real estate market is changing at an unprecedented speed. Falling prices and new environmental standards are forcing profound changes on investors. It is no longer just a matter of choosing the right assets, but of understanding structural trends – teleworking, decentralization, digitalization – and adapting to them. Those who align their portfolios with these new challenges will be the winners in the long term.

sources:
Banque de France, Real Estate Economic Outlook Note Q4 2024, www.banque-france.fr
Crédit Logement/CSA Observatory, Monthly Barometer, www.creditlogement.fr

Tribune by Nicolas Brosseaud, Managing Director of Catella Valuation (LinkedIn).