The French real estate market is entering the 2026 school year in a state that professionals describe as “convalescent.” After a low point of 780,000 sales in 2024, volumes are gradually rising, with around 940,000 transactions expected for the year. This rebound is still far from the record of 1.1 million sales recorded in 2021, and several factors are hindering the dynamics that many had hoped would be more robust.
The geopolitical context, the rise in long-term rates, and territorial disparities create a landscape that is more technical than a simple “return to normal.” Understanding what is at play requires going beyond the usual reading of the real estate cycle.
Oil shock and borrowing rates: the brake that few analyses detail
Most back-to-school assessments mention a “cautious recovery” without explaining why it remains so fragile. The conflict in the Middle East has caused an oil shock that has increased the cost of French sovereign debt. Consequently, long-term rates have risen, pulling mortgage rates up with them.
According to Empruntis, this unexpected rise has halted the momentum that began in late 2025. The average borrowing rates for individuals reached 3.65% on September 1, 2026, according to SeLoger data reported by Sud Ouest. The direct consequence: a loss of purchasing power between 2025 and 2026 for the same budget.
Buyers who were counting on a continuation of the rate decline that began in 2025 now face a stabilized credit cost at a high level. This situation weighs on real estate purchasing power and partially explains the persistent caution of buyers, particularly first-time buyers. Analyses published on the Immo Radar website allow for tracking these developments over the months.
Real estate prices in France: an uneven correction across territories
Paris shows a visible recovery with a 15% increase in transaction volumes in the first quarter of 2026 compared to the same period in 2025. This Parisian dynamic masks very different realities elsewhere.
The market is fracturing into three categories of territories:
- Attractive metropolitan areas (Paris, Lyon, Bordeaux) where rental demand and prices are rising again, driven by structural tension on housing
- Medium-sized cities that benefited from a post-Covid influx and where prices are now stagnating due to a lack of local economic growth
- Rural and peri-urban areas far from employment centers, where sale timelines are lengthening and sellers must accept price reductions to close deals
This fragmentation makes any national average misleading. Location is becoming the primary criterion for valuing a property, even more so than during the previous decade.
New housing in France: a production crisis fueling tension
The new housing segment remains the black spot of the market. After two years of crisis, construction is struggling to pick up despite positive signals from the French Building Federation, which anticipates a slight recovery. Construction starts remain at low levels.
Several mechanisms are at play. Construction costs, burdened by material inflation, make new programs difficult to access for households. Developers, faced with reduced margins and a stock of unsold properties, are limiting launches. Local authorities, for their part, are issuing fewer building permits in certain tight areas.
The result is a deficit of new housing that fuels tension in the existing and rental markets. In major urban areas, this shortage drives rents up and makes homeownership even more difficult for modest households.
The DPE as a market filter
The energy performance diagnosis has become a true discriminant. Energy-inefficient properties (labels F and G) suffer price reductions upon purchase, while renovated or well-rated properties sell more quickly and at better prices. The gradual ban on renting the most energy-consuming homes accelerates this phenomenon: landlords must renovate or sell, creating an influx of properties in certain local markets.
Field reports vary on the actual extent of this discount. In very tight areas, a property rated F finds a buyer without major difficulty. In contrast, in relaxed markets, the discount can reach significant levels and considerably lengthen sale timelines.
Rental investment in 2026: a profitability calculation to reconsider
The end of the Pinel scheme has reshuffled the cards for investors. Without comparable tax advantages, gross profitability becomes the sole decision-making criterion for rental investment. Cities where rental yield remains attractive are not necessarily the most expensive.
Several parameters complicate the calculation:
- The cost of credit, stabilized around 3.65%, reduces the leverage effect compared to the low-rate period
- Energy renovation obligations impose works that burden initial profitability but protect long-term value
- Rent controls, extended to new urban areas, limit income potential in the most sought-after zones
The available data does not yet allow for measuring the full impact of these developments on investment flows. Initial indicators suggest a partial shift towards real estate investment trusts (REITs) and towards regional markets offering better yields.
The French real estate market in September 2026 reads like an equation with multiple unknowns: trajectory of bond rates, pace of new construction, actual timeline of rental bans related to the DPE. The recovery exists, but it remains selective and geographically fragmented. For both buyers and investors, the trade-off between location, energy performance, and credit cost has never been more decisive.
