With approximately 775,000 transactions recorded in 2024 according to FNAIM, the French real estate market has reached its lowest point in several years. This decline of 36% compared to the peak in 2021 reshapes the power dynamics between buyers, sellers, and lenders. What indicators can measure the extent of this recalibration, and what signals should be monitored moving forward?
CRR3 Regulation and Future Cost of Home Loans
Articles dedicated to the real estate market in 2024 focus on current interest rates. Few incorporate a regulatory dimension that will weigh on residential credit in the medium term: the European regulation CRR3 (EU No. 2024/1623 of May 31, 2024).
This text modifies the capital requirements imposed on banks. It introduces a floor of 72.5% on risk weights derived from internal models. In practical terms, banking institutions will no longer be able to minimize the capital tied up for each housing loan granted.
The CCSF (Financial Sector Advisory Committee) identifies this reform as the most concrete threat to the future cost of home loans in France. The gradual implementation is expected by 2032. To follow real estate news on Actualité Premium, this type of regulatory signal is as significant as quarterly rate fluctuations.
The issue is structural: even if benchmark rates decrease, the prudential cost could offset part of this relief for borrowers.
Transactions and Real Estate Prices in 2024: Comparative Table
To measure the extent of the turnaround, a year-by-year comparison is clearer than a linear commentary.
| Indicator | 2021 (peak) | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Transactions (existing homes) | Record level | ~1.12 million | ~869,000 | ~775,000 |
| Price evolution (annual average) | Sustained increase | Moderate increase | -4% year-on-year (CSN) | Ongoing stabilization |
| Second half dynamics | Strong activity | Initiated slowdown | Continued decline | Stabilization of volumes |
The sales volume in 2024 represents a decline of about 11% compared to 2023 and 36% compared to 2021. FNAIM notes that the drop was halted in the second half of 2024, with a stabilization of volumes that could precede a recovery.
On the price side, CSN recorded a decline of 4% in 2023. The 2024 trend points towards stabilization in the existing market, but the new market is following a different trajectory.
Old vs. New Real Estate Market: Opposing Dynamics
The existing segment shows signs of leveling off. Prices are no longer declining in several areas, and buyers with personal contributions are regaining negotiation margins.
In contrast, the new market remains under pressure. Construction costs, strengthened environmental standards, and the scarcity of land keep prices high. The gap between new supply and household purchasing power is hindering sales of new homes, even as rental demand remains strong in metropolitan areas.
This divergence creates a displacement effect: buyers are increasingly turning to existing homes, which supports volumes in this segment while leaving new homes in difficulty.
Mortgage Rates: The Decline and Its Limits
After significant increases in 2022-2023, mortgage rates began to decline in the second half of 2024. The decreases in benchmark rates from the ECB have allowed banks to offer progressively more favorable conditions.
Several factors limit the extent of this relief:
- The HCSF criteria remain in effect: effort rate capped at 35% of income and maximum duration of 25 years, which excludes some first-time buyers
- The aforementioned CRR3 regulation could add a prudential cost in the medium term, regardless of monetary policy
- Banks maintain high personal contribution requirements, particularly for low-income profiles or rental investors
The decline in rates is not enough to restore the borrowing capacity of households that had been excluded from the market. A return to activity levels comparable to 2019 or 2021 would require a combination of low rates, adjusted prices, and a relaxation of lending conditions.
Regional Disparities: Markets with Multiple Speeds
National averages mask considerable disparities. FNAIM notes particularly marked sales contractions in the southwest of the country, with declines ranging from 18% to 30% in Gironde, Lot-et-Garonne, Haute-Garonne, and Pyrénées-Orientales.
Conversely, some areas are benefiting from a renewed attractiveness linked to remote work and the search for quality of life. Well-connected medium-sized cities are capturing some of the demand leaving large metropolitan areas.
The French real estate market does not evolve uniformly. A purchase in a tight metropolitan area and a purchase in a declining medium-sized city do not follow the same pricing, negotiation, or valuation outlooks.
The low plateau reached in 2024 serves as a reference point. The stabilization of volumes in the second half suggests a possible rebound, but this will remain conditioned by the trajectory of rates, regulatory evolution (CRR3), and the ability of the new market to regain balance. The coming quarters will reveal whether the floor holds or if the market enters a phase of slow recovery, at a low pace.
