Since 2020, the median price of an apartment in France has increased by 24% in cities with more than 100,000 inhabitants, while the average income has only risen by 8%. In some urban areas, the cost of a house has doubled in ten years, despite a decline in new construction.
Rent control, intended to limit the surge, coexists with record transactions and unprecedented tensions between supply and demand. Rural areas, historically affordable, now show increases similar to those in urban centers.
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Why is real estate so expensive today? Key trends to know
The numbers don’t lie: Why is real estate so expensive, and how far will the spiral go? The French real estate market is undergoing a profound transformation. Several dynamics intertwine, exacerbating the rise in real estate prices and complicating every purchasing project.
The skyrocketing mortgage rates reduce buyers’ maneuverability. Recent statistics show a significant increase in the mortgage rates, closing the door to homeownership for many households. However, the decline in demand does not come with a global decrease in prices, mainly due to an insufficient housing supply. The imbalance is settling in:
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- Few new homes are coming onto the market
- Residential mobility is stagnating
- The urban population continues to grow.
In major cities as well as in medium-sized towns, the pressure on the real estate market is intensifying. The real estate price in France is reaching records, supported by the scarcity of land, rising construction costs, and increasingly strict regulatory constraints. Households are adapting: some are postponing their purchasing plans, others are broadening their search to the outskirts or betting on the zero-interest loan to try to balance their budget.
To understand why real estate remains so expensive, one must look at public policies, financing conditions, as well as the strategies adopted by sellers and buyers. This question currently structures the debate, and a detailed analysis is provided on the page “What explains the higher price of an apartment compared to a house”.
Houses and apartments: how do prices evolve by region and property type?
It is impossible to ignore the strong territorial disparities that shape the market. Paris remains at the top, with a real estate price per square meter that far exceeds the national average. Other major cities, such as Marseille or Lyon, also feel the pressure, but local realities vary:
- On the outskirts or in certain medium-sized towns, a correction is sometimes observed, particularly in specific segments.
Choosing between house and apartment leads to significant price differences. In areas where demand is exploding and supply is scarce, the apartment remains favored by buyers. Conversely, the house, especially with a garden, attracts more interest in the outskirts or in the countryside, where space is valued more. However, the price increase does not stop: the shortage of land and the rising cost of renovations also weigh on the house price.
Some examples illustrate these gaps:
- In Paris, the average price per square meter for an apartment reaches new heights, making buying a house almost impossible.
- In many French cities, the gap between house and apartment is narrowing, indicating that demand is evolving.
- The real estate price trends also depend on the general condition of the property, the precise location, and the dynamism of the neighborhood.
The geography of prices is changing: shifts in habits, amplified since the health crisis, are redistributing real estate value. Households are reassessing their priorities: space, location, type of housing. The real estate market for houses and apartments is reshaping according to these choices, producing a constantly evolving map of housing prices.
Should you buy, sell, or wait in 2025? Practical advice for better decision-making
Interest rates that guide reflection
The continuous increase in interest rates tests the borrowing capacity of potential buyers. The market adjusts only slowly, and any price decreases, when they occur, are often too modest to offset the rise in monthly payments. Before bringing your real estate project to fruition, take the time to objectively assess your position: how much room is there for negotiation in such a volatile context? It is better not to venture without having tested the strength of your file, especially if financial balance depends on the evolution of borrowing rates.
Here are some benchmarks to help you navigate the current period:
- A real estate purchase remains feasible for those with a substantial down payment or who are looking for long-term housing.
- On the selling side, an accurate real estate appraisal becomes essential: the gap between supply and demand has widened, making negotiations more tense.
- For a rental investment project, it is no longer enough to rely on gross profitability: a thorough analysis is necessary before diving in.
The year 2025 does not appear to be one of great upheaval. Experts are closely monitoring every indicator, from interest rates to changes in residential paths. Take the time to reassess your borrowing capacity and confront your projects with the reality of the local market. Between major cities, medium-sized towns, and rural areas, situations diverge. Here, waiting dominates. There, a window of opportunity opens discreetly, but always against a backdrop of uncertainty. It remains for each to find a way to move forward, without ever losing sight of their own priorities.