Real Estate in France: New Housing Sales Down 23.2%

In the second quarter, new housing reservations in France fell by 23.2% year-on-year, reaching approximately 19,350 units, according to the Federation of Property Developers (FPI). In comparison, there were 42,310 reservations in the second quarter of 2021, indicating a more than twofold decrease in the market over five years. The president of the FPI, Pascal Boulanger, expressed concern about the current situation, stating that the market has never been this weak. The Jeanbrun scheme, intended to stimulate rental investment, recorded only 150 to 200 reservations per month, which is less than 5% of the target of 4,000 monthly reservations. The Minister of Housing acknowledged the need to strengthen this scheme. Meanwhile, the European Central Bank (ECB) raised its key interest rates by 0.25 points, bringing the deposit rate to 2.50%. Mortgage rates, currently around 3.50% for 20 years, could reach 4% by the end of the year, thereby reducing borrowing capacity. In the existing market, prices fell by 1% in the second quarter compared to the previous quarter. In terms of construction, only 370,673 housing units were authorized between August 2025 and July 2026, which is 9.5% less than the average of the previous five years, potentially leading to a lasting housing crisis.

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