‘Never seen this in 54 years’: French property market warning

A leading French estate agency has issued a warning about the current French property market, citing a spike in agreed-sale cancellations partly due to mortgage refusals alongside a squeezed rental market. 

"What we are experiencing in the French real estate market today is something we have never seen in Foncia’s 54-year history,” said the agency’s CEO Zahir Keenoo.

The number of transactions of existing properties fell by 7%, states the agency, and the cancellation of sales following a preliminary agreement increased by 11%. 

“You could say that one in ten deals falls through,” Mr Keenoo said, speaking at a press conference. “Housing is becoming a barrier to social mobility and a factor undermining purchasing power.

“This creates obstacles at every stage of life. Hundreds of thousands of students trying to find their first flat are forced to settle for locations far from major cities or opt for shared housing, professional mobility declines, and family plans are postponed by years or even abandoned altogether.” 

Buyers purchasing power reduced

One reason for the drop in fulfilled sales is prospective buyers being unable to obtain a mortgage for the property.

France has a strict limit on debt-to-income ratio, with monthly mortgage payments capped at 35% of monthly income.

While banks can diverge from these for a small number of cases (and a recent bill by centrist MP Lionel Causse sought to make them less restrictive) wider economic uncertainty has led to greater caution.

In addition mortgage rates are higher than they have been in earlier years.

In 2021 interest rates were around 1.05% meaning a €1,000 mortgage payment provided buyers with a borrowing capacity of some €216,400. 

However, in 2026 the same monthly payment only allows for a borrowing capacity of around €176,300, given interest rates at 3.25%. 

“Our real estate consultants all say the same thing: property viewings are taking place and people have plans, but the final decision isn't being made,” said president of the Foncia’s leasing and transaction wing Jordan Frarier.

“It is not a problem of supply or demand; it is a problem of confidence. And that confidence will only return once the economic and political environment stabilises,” he added.

"If there are projects in the works, now is the time to carry them out, because we don't know how things will play out in October or November,” Mr Frarier said, hinting that banks may become even more restrictive in future months. 

Struggling rental market 

More widely, France’s rental market is facing a major squeeze, with a huge increase in demand - including from would-be first-time-buyers unable to purchase a home - and a lack of supply. 

Mr Keenoo called the emerging rental crisis “structural, deep-seated, and long-lasting.” 

Since the start of the year, the group has received 225,000 applications from approved potential tenants (those that pass the preliminary screening process to be able to rent in France), 30% higher than this point last year.

However, the agency has only 8,400 properties to rent across France, and just 70 in Paris. 

In larger cities such as Paris, Bordeaux, and Lyon, only 1.5% of Foncia’s rental stock remains available.

In most major cities, its number of available properties for rent has reduced significantly, including Toulouse (-6.7%), Marseille (-11.8%) and Nice (-22.4%).

At the same time, mid-size cities including Limoges, Grenoble and Poitiers are seeing the number of properties available to rent increase, as lower property costs help a buy-to-rent market.

Notices by tenants that they wish to vacate properties managed by Foncia are down 7% so far this year.

The squeeze has been worsened by government policies that have taken energy inefficient homes off the market (although a new law aims to allow them back on if landlords commit to renovating them in due course). 

“Contrary to popular belief, many landlords in France are retirees who lack the funds to carry out renovations and prefer to take their properties off the rental market,” Mr Keenoo said.

Tax changes are also a factor, he added, citing an end to the ‘Pinel’ scheme (which sought to encourage private investment in rental properties) and highlighting that none of the 9,000 new landlords added to Foncia’s portfolio in the first half of 2026 had used its replacement, the ‘Jeanbrun’ scheme.

Do others agree? 

The alarming tone of the Foncia report has caused it to stand out, but others have also warned of the market entering a new ‘slump’. 

In June 2026, the Fédération Nationale de l’Immobilier (Fnaim) held its own press conference on the state of the market. 

It said that sales had fallen by around 17,000 in the previous two months, and estimated that around 900,000 sales would be recorded across 2026.

This would be a 5% drop compared to 2025, with the figure hovering around those recorded in the post-Covid slump. 

Fnaim president Loïc Cantin pointed towards several factors making potential buyers more reluctant to enter the market, including the impact of the conflict in the Middle East.

The conflict has led to increased cost of living for many households via high fuel costs, a spike in inflation, and more expensive energy bills, while leading individuals to be more cautious about big spends in the context of economic uncertainty. 

This is yet to impact property prices however, which Fnaim said remained essentially stable at an average €2,994 per m² in June 2026, down -0.1% from June 2025.

Estate agency Century 21 France also raised issues over the state of the market in its mid-year report. 

It cited longer sales times (an average of 105 days to complete a sale, up six days in a year).

In their most recent report (late April 2026) which covers the sale of all homes, alongside mortgage rate information compiled from Banque de France data, the Notaires de France were cautiously optimistic about the state of the market, although they highlighted its fragility and raised doubts about its ability to withstand economic uncertainty.