A landlord who receives an energy performance certificate (DPE) rated G for their Parisian two-room apartment at the end of 2024 faces a dilemma: renovate before the rental ban, sell at a loss, or withdraw the property from the market. This scenario is becoming increasingly common and summarizes the tension running through the real estate sector in 2024.
The market is no longer just a price curve or a credit rate. Regulatory constraints, the reshaping of the rental supply, and buyer behavior are redefining the rules of the game.
DPE and thermal sieves: the constraint restructuring the rental market in 2024
Since January 1, 2023, homes consuming more than 450 kWh/m²/year (the G+) are excluded from the decent rental stock. As of January 1, 2025, the entire G class will be banned from rental for new leases and renewals. The Climate and Resilience Law sets a strict timeline:
- Complete G class: effective ban since January 2025 for any new lease contract in mainland France.
- F class: ban scheduled for January 1, 2028, leaving little room for affected landlords.
- E class: deadline set for January 1, 2034, but condominiums will need to anticipate the collective DPE well before.
On the ground, this mechanism produces two simultaneous effects. On one side, properties are leaving the rental market due to lack of timely renovations. On the other, some of these homes are shifting to sales, often with a discount related to their energy label.
To follow these regulatory developments and their concrete impact on transactions, regular analyses can be found on the perspectivemedia.fr website dedicated to real estate, which details these topics by market segment.
Feedback varies on this point depending on the regions: in tight areas, owners are more likely to undertake renovations because the rental yield justifies the investment. In rural areas, selling at a discount often remains the only realistic option.
Real estate transactions 2024: a floor reached after three years of decline
The volume of sales in the existing market continued to decline in 2024. According to Fnaim, the market recorded about 775,000 transactions, a drop of 11% compared to 2023. This is the lowest level in several years.
The decline is not uniform. Dense urban markets have held up better, supported by a structural demand that does not disappear.
A second half of 2024 that stabilizes volumes
The first half of 2024 extended the downward trend of 2023. The shift began in the second half, with a stabilization of sales volumes that suggests a floor. The successive cuts in benchmark rates decided by the European Central Bank have eased credit constraints, although the effect on monthly payments remains gradual.
In practical terms, a buyer who was denied their application at the beginning of 2024 was able to obtain a principle agreement six months later, with the same project. The unlocking comes from both the drop in rates and the easing of underwriting criteria by some institutions.
Real estate prices in France: moderate correction and local disparities
After a 4% drop in 2023 (annual average according to the Higher Council of Notaries), the correction in prices has softened in 2024. Fnaim speaks of a more moderate decline, on the order of a few percentage points, with strong variations depending on location and type of property.
There is a clear decoupling between old and new properties. The old market is tending towards price stabilization in major metropolitan areas, while the new remains under pressure due to high construction costs and reduced production.
What the indices do not always show
The average price indices mask a selection phenomenon. The properties sold in 2024 are more often well-rated in terms of DPE, located in sought-after areas. Thermal sieves, on the other hand, remain on the market longer or undergo tougher negotiations.
For a buyer, this means that the listed price does not reflect the actual negotiation margin, especially for energy-intensive properties.
Mortgage rates: the easing underway changes the game for buyers
The year 2023 ended with average rates exceeding 4% over 25 years. In 2024, the successive cuts in benchmark rates by the ECB have led to a gradual decline in rates offered by commercial banks.
On the ground, the difference is measured in borrowing capacity. A household that could finance a property of 200,000 euros at the beginning of 2023 regains several thousand euros of additional capacity by the end of 2024, with constant income. This mechanical gain does not erase the previous increase, but it reopens the door to projects that have been blocked for two years.
Banks have also adjusted their commercial posture. After a period of credit rationing, several networks have relaunched attractive offers to capture first-time buyers, a segment that had almost disappeared from the statistics in 2023.
What concrete impact on buying decisions
The easing of rates is not enough to massively relaunch the market. The economic context (employment, budgetary restrictions, political uncertainties) slows down decisions. We see buyers who are better financed but more cautious, taking the time to compare and negotiate.
The real estate market in 2024 is neither in open crisis nor in a strong recovery. It is a year of transition where buyers with solid contributions and clear projects are making their way, while sellers of poorly rated properties must accept a price adjustment that, just two years ago, would have seemed unthinkable.
