French property market: five things to watch for in 2027

France’s property market could face a difficult 2027, with rising mortgage rates and economic uncertainty threatening to slow sales.

Despite an increase in transactions over the past year, notaires say the market is showing signs of losing momentum, with buyers and sellers increasingly hesitant to commit.

The latest quarterly report from the Notaires de France examines sales, house prices, mortgage rates and new-build construction to assess where the market is heading.

The group’s report is the most comprehensive dataset for the property market as it contains information on all existing home sales – properties at least five years old or with more than one previous owner – in France.

The most recent dataset covers sales between April/June 2025 - April/June 2026, and uses preliminary data to suggest current trends. 

It also compiles information in several other areas to suggest future trends in the market, including mortgage rates and new-build construction. 

“The primary risk concerns transaction volumes in the existing-home market rather than another sharp drop in prices,” said notaires, offering a snapshot of current market conditions.

“The end of the year may see a boost from the completion of projects already underway and from estate-planning transactions, such as gifts, which could provide a temporary lift to the activity of notarial offices without necessarily signaling a broad market recovery.”

“The beginning of 2027 warrants particular caution: persistent economic and budgetary uncertainties, potential pressure on interest rates, and the approach of the presidential election could lead households to adopt a ‘wait-and-see’ stance.”

Below, we cover the five main points. 

A tottering market? 

Scratch beneath the surface and the property market may be struggling despite positive outward signs, notaires warn. 

Between August 2025 - August 2026, 951,000 property sales were recorded, an increase of 3.6% year-on-year.

On the face of it, this is good news and shows a property market that has seemingly recovered from the post-Covid slump. 

However, this year-on-year growth has slowed considerably, and at the end of 2025 was around 13%. 

Year-on-year sales figures are comparable to those seen in 2017, but this was when the market was on an upward trajectory, and current figures suggest it is instead plateauing, with numbers set to stabilise. 

“The market is not suffering so much from a lack of intent to buy or sell as it is from a lack of clarity regarding economic prospects and the conditions required to move forward,” said notaires. 

“Buyers are taking more time to make decisions, negotiating more aggressively, or postponing their plans while waiting for more favorable conditions. As for sellers, some are still struggling to accept current market values and are choosing to delay their sales.

“This gap between the expectations of buyers and sellers is acting as a brake on transactions.” 

Are prices going to fall again? 

Data on property price shifts in the main period covered were erratic, seeing increases and drops in roughly equal measure across France.

Many cities that had previously performed well suddenly saw sharp decreases, or otherwise stagnated. At the same time, several smaller cities continued to see price increases.

More information on house price changes – and flat price changes – is available in our linked articles.

However, data from the last three months of full data (March 2026 - June 2026) show prices falling in all categories and areas aside from flats in some parts of the Île-de-France region.

This included a -1.3% drop in house prices nationally and a -0.7% drop in flat prices. 

This is far more pronounced outside of the Île-de-France capital region (-1.4% for houses, -0.8% for flats), with prices around the capital dropping less sharply. 

“The market appears to be struggling to regain a stable footing, operating within an environment defined for several years by a succession of crises and economic shocks.”

“Following the health crisis and the subsequent energy shock, geopolitical tensions and concerns regarding public finances continue to fuel uncertainty.” 

The uncertainty is leading would-be buyers to remain cautious, opting to save rather than buy, with concerns that household budgets are going to be further tightened due to the above concerns or inflationary pressures. 

Mortgage rates rise 

Another factor impacting the market is a jump in mortgage rates. 

Rates reached 3.32% in August, up from 3.30% in July, but are now climbing quickly, close to 4%. 

This would see rates back at highs seen at the start of 2024 during the peak of the post-Covid property slump. 

Full data on rates in September and October will confirm exact levels, but the increase will worry both would-be buyers and lenders, knowing it could further stall the market. 

A hike on interest rates by the European Central Bank (ECB), as well as inflation and high cost of living expenses – particularly fuel – have sparked fears over the ability for households to deal with higher mortgage costs. 

However, it is not only first-time buyers who would be hit by these high rates. 

“A rise in mortgage rates beyond the 4% mark would be a particularly concerning threshold. It would diminish households’ real estate purchasing power and could lead to further project deferrals. It also risks hindering the mobility of homeowners who secured loans at very low rates between 2019 and 2021.”

“When these individuals sell their property to purchase another, the additional cost of a new loan could absorb a significant portion of any capital gains realised, particularly if they are unable to retain or refinance their original mortgage.” 

Marine Le Pen of the far-right Rassemblement National announced a policy of ‘mortgage portability’ as part of her manifesto for the 2027 presidential election, which would see existing homeowners able to keep their current loan when buying a new property.

New-build market also struggling 

France’s beleaguered new-build market is also struggling to cope with the current economic conditions. 

“Economic and regulatory uncertainties continue to weigh on the decisions of investors and developers, while the volume of housing starts remains insufficient to meet long-term needs.” This includes changes to buy-to-let schemes.

In August 2026, housing permits for new-builds saw a slight drop (-1.1%) compared to July. 

Between Q2 2025 - Q2 2026, the number of units put to sale (mises en vente) dropped by -6.5%, and cancellations of sales reservations were up +7.5%.

In good news, however, the number of projects that started construction in August 2026 increased by +4.1%, with a stronger increase for multi-unit constructions (+4.9%). 

Energy efficiency remains important 

Finally, notaires assessed the effect of a property’s energy rating (Diagnostic de Performance Énergétique, DPE) on sales, up to the second quarter of 2026. 

“Homes rated C and D accounted for 23% and 35% of sales, respectively, an increase of 2 and 3 percentage points, while the share of less efficient homes (rated E) fell by 5 percentage points to 20%,” said notaires.

The trend has continued into 2026, with homes rated ‘C’ now making up 27% of sales.

‘E- rated properties have also seen a drop in sales, from 20% in 2025 to 17% in 2026. 

However, changes were less pronounced for smaller flats, which saw only 18% of sales for units rated C and 32% for those rated D, compared to 28% and 36% for other flats. 

Notaires note that changes to classifications in 2024, which sought to classify smaller properties less harshly, may have affected this. 

Currently, the impact of heatwaves on property sales has been minimal, but this could change if sustained periods of intense heat in the summer becomes the norm.

“Episodes of extreme heat can occasionally disrupt real estate activity, for instance by leading to the postponement of property viewings or moving dates. At present, however, they do not represent a major national factor that would explain trends in prices or transaction volumes.”

“In the longer term, climate change could widen valuation gaps between properties—an extension of the effects already observed regarding the "green value" of homes. Factors such as summer comfort, exposure to heat, location, and natural risks may increasingly influence buyers' decisions and the valuation of properties.”

This could also see a shift in where people choose to buy.

You can read the full report on the Notaires de France website.