Why are property prices falling in France?

France’s property market has recorded another drop, with prices for existing homes, logements anciens, falling by 1% between the first and second quarters of 2026 - a reduction of 0.8% year-on-year. 

So what is behind the continuing fall in prices?

Priscille Caignault, member of the Bureau of the Conseil supérieur du notariat (the official authority representing all notaires in France), responsible for property, said the figures currently point to a correction rather than a major downturn.

Buyers are still looking for homes

“I believe there have always been buyers,” Ms Caignault told The Connexion. 

People still need somewhere to live, she said, but they are paying closer attention to the characteristics and cost of the property.

“What triggers a purchase today is the relationship between the financial capacity that you have, the financing capacity that you have for your project, and the price that is in front of you.

“If the price is too high, the seller has to lower the price. Otherwise, the transaction will not happen.”

This, she said, is why the adjustment is currently being seen more clearly in prices than in the number of transactions, which have remained generally stable with around 958,000 homes sold during the 12 months to the end of June compared to 953,000 at the end of March and 952,000 at the end of December.

Why are houses falling more than apartments?

The latest figures show a clear difference between houses and flats. Over the year to the second quarter of 2026, flat prices fell by just 0.1%, while house prices fell by 1.3%.

“With a more restricted financial capacity, it may be easier to buy an apartment than a house,” Ms Caignault said.

Additionally, houses also bring another potential financial burden: renovation.

“With houses, there can be a cost of energy renovation that weighs on the investment,” she said.

A buyer therefore has to consider not only the purchase price but also whether they can afford the work that may follow.

“You are buying a property which already has a certain price because it is a house, but you also have to think about the work that will be required.

“Will we have the financial capacity to plan for the work? That also plays a role.”

She said there could be other factors, including the concentration of buyers in city centres and large metropolitan areas, where apartments are more common.

Poor energy ratings are now affecting prices

Ms Caignault also said the DPE (Diagnostic de Performance Énergétique) rating had also gone from being a relatively marginal consideration to an important factor when buyers assess a property.

“A home that is poorly rated will sell for less, while a home that is well rated, on the contrary, benefits from higher valuation.”

This has become particularly important as people are concerned about keeping homes comfortable during periods of extreme heat.

“People are now saying that the home must be energy efficient both in winter and in summer,” she said.

Higher interest rates are squeezing buyers

Of course, the wider issue behind affordability is the cost of borrowing.

When mortgage rates rise, households can borrow less for a similar monthly payment. That puts pressure on sellers to reduce their prices if they want to complete a transaction.

“It is more of an adjustment today than a major market trend,” said Ms Caignault.

But she said the situation would need to be watched closely, particularly going into 2027.

“We remain vigilant because the macroeconomic criteria are nevertheless deteriorating.”

She pointed to renewed inflation and higher government borrowing costs as factors that could eventually feed through into mortgage rates.

Geopolitics affects property prices

Geopolitical events can also reach the property market, but mainly through their economic consequences.

“The geopolitical crisis in the Middle East has had an impact on the property market through macroeconomic parameters,” she said.

“It created pressure on energy costs, and therefore another increase in inflation.

“To control inflation, there is an impact on interest rates and when interest rates rise, that means mortgage rates can rise.” she said.

Could the presidential election affect the market?

Another source of uncertainty is France's presidential election next year.

Ms Caignault said investors may be more cautious while they wait to see what future government policy could mean for property.

“Depending on the programmes of the different candidates, we are going to have a market that is a little more expectant,” she said.

For investors, questions include future taxation, housing policy and possible government measures.

“All of this means that investors can be cautious and say: we are not going in just yet.”

A market adjusting, not collapsing

For now, Ms Caignault does not see the figures as evidence of a major reversal.

She said buyers remain present but are increasingly constrained by what they can afford, while sellers have to take those limits into account.

The bigger concern is what happens if borrowing costs rise further or economic and political uncertainty increases.

“We need to remain vigilant for the future,” she said.

“But the market is not turning around today.”