Authored by the expert who managed and guided the team behind the France Property Pack
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What will happen in Paris’s real estate market? Will prices go up or down? Is Paris still a hotspot for foreign investors? How is France’s government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with notaries, real estate agents, and clients who buy properties in Paris, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
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1) International investors will flock to the 11th arrondissement for its lively culture and nightlife
The 11th arrondissement is becoming a hotspot for international investors, thanks to its vibrant cultural scene and nightlife. In 2024, Deka Immobilien's acquisition of "My little Nation" for EUR 89 million highlighted the growing interest in this area, showcasing its appeal as a prime urban setting with high sustainability standards and an attractive tenant mix.
The arrondissement's popularity is further boosted by increased foot traffic and tourism, as evidenced by its status as one of the most viewed neighborhoods on Airbnb. This trend is expected to continue, especially with the Paris 2024 Olympics drawing global attention and visitors.
Moreover, the 11th arrondissement hosts a variety of cultural events and festivals, such as the La Chaise et l’écran cinema festival and the Festival Classique au vert. These events contribute significantly to the area's vibrant cultural scene, making it even more appealing to investors.
Sources: Choose Paris Region, Paris Je T'aime, Deka Immobilien, Airbnb News
2) Rents in student areas will rise as more international students arrive
In recent years, the number of international students in Paris has been steadily increasing. For instance, in the academic year 2023/24, there were 430,466 international students, marking a 4.6% increase from the previous year. This growing influx of students naturally leads to a higher demand for housing, especially in areas close to universities.
Popular academic districts like the 5th arrondissement, home to institutions such as Sorbonne University, are particularly affected. The demand for housing in these areas is high, which pushes rental prices up. For example, students in the 5th arrondissement can expect to pay between €550-€650 for a room in a shared apartment or about €1,200 for a studio.
Moreover, the limited supply of student housing exacerbates the situation. The Cité Internationale Universitaire de Paris, a major student housing provider, accommodates over 5,800 young people, but this is not enough to meet the growing demand. As a result, rental prices continue to rise as more students compete for the available spaces.
Sources: The PIE News, ICEF Monitor, HousingAnywhere
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of France. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
3) Demand for accessible and senior-friendly housing in Paris will grow as the population ages
The aging population in Paris is on the rise, with a notable increase in those aged 75 and over expected by 2030.
In Île-de-France, the number of seniors is projected to hit 1.2 million, marking a 44% increase over 15 years. This surge is largely due to longer life expectancies, as more people are living well into their senior years.
Many of these seniors prefer to stay in their own homes, a concept known as "aging in place." This trend means there's a growing need to adapt existing homes to be more accessible and senior-friendly.
The French government is on it, rolling out policies like the "Old Age and Autonomy" roadmap and the "Healthy Ageing" strategy. These initiatives aim to create age-friendly environments and support the development of infrastructure that caters to seniors.
Financial aids, such as the "aid for adapting housing to ageing," are available to help seniors modify their homes. This support is crucial for making homes safer and more comfortable for the elderly.
With these changes, the demand for senior-friendly housing is expected to grow, making it a key area for potential property investment. Investors might find opportunities in adapting or developing properties to meet this rising demand.
Sources: Apur, UNECE, Knight Frank
4) Demand for luxury penthouses will rise as international buyers seek exclusivity
Paris is now a prime spot for luxury property investments, drawing in international buyers.
By 2024, a large chunk of real estate deals in Paris involved international buyers, with British and American investors particularly keen on luxury urban markets. This shows a rising interest in exclusive properties like luxury penthouses.
Properties priced over €5 million saw an 8% jump in transactions, with over 60% of these high-value purchases made by international buyers. This trend underscores the global appeal of Paris's luxury real estate to wealthy individuals.
The global count of high-net-worth individuals (HNWIs) rose by 4.7% in 2024, fueling the demand for luxury properties. As more HNWIs seek exclusive real estate, Parisian penthouses stand out due to their scarcity and the city's esteemed reputation.
Media attention on luxury living in Paris and its consistent ranking as a top luxury real estate destination boost its charm. This visibility draws international buyers eager for exclusivity.
Paris's allure is further enhanced by its cultural richness and lifestyle, making it a magnet for those seeking a blend of luxury and heritage. The city's unique blend of history and modernity adds to its desirability among affluent buyers.
Sources: Adrian Leeds, Vendome Property, Proven Partners, Porto Montenegro
5) Affordable housing projects will stabilize prices in some areas, stopping sharp increases
Affordable housing projects are key to stabilizing property prices in certain areas.
Take Paris, for example. When the city invests in affordable housing, like the Caserne de Reuilly project, it boosts the housing supply for residents. This increase in supply helps balance the market, preventing drastic price hikes that can make living in the city unaffordable.
Looking back, Paris has a history of using social housing to keep property prices in check. From 2001 to 2023, the city financed 123,868 social housing units. This move was crucial in managing housing demand and avoiding sharp price increases. It shows that more affordable housing can ease market pressure.
Real estate experts agree that boosting housing supply, including affordable options, can stabilize prices. Projects like la Samaritaine, which incorporate social housing, are examples of how mixed-income developments can align with local policies. This alignment ensures that housing stays accessible to more people, keeping prices stable.
In Paris, these efforts are not just about building homes; they're about creating a balanced community. By integrating affordable housing into the urban fabric, the city supports a diverse population, making it a more inclusive place to live.
Such projects are vital for cities facing housing crises. They offer a blueprint for how urban areas can manage growth while maintaining affordability, preventing drastic price surges that could push residents out.
Sources: Apur, Shape Affordable Housing, CRE
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6) Demand for rentals near major universities will grow as more international students arrive
In the past few years, particularly in 2023 and 2024, France has seen a record number of international students enrolling in its universities. This increase, driven by students from regions like Asia-Pacific, has led to a significant rise in the number of students needing accommodation.
Paris, being home to many major universities, has experienced a surge in demand for student housing. Institutions like Sciences Po have partnered with service providers to offer various housing options, but reports still indicate shortages near these universities. This shortage is partly due to the preference of international students to live close to campus for convenience and community engagement.
Despite efforts to provide more housing, the supply of rental properties has not kept pace with the growing demand. This has led to rising rental prices in university districts, making it challenging for students to find affordable accommodation. The French government and universities continue to promote France as a top destination for international students, further fueling this demand.
Sources: Infinite News Desk, Sciences Po, ICEF Monitor
7) Rents in sustainable buildings will increase as more tenants focus on eco-friendliness
Tenants are increasingly drawn to eco-friendly living spaces as awareness of climate change grows.
In Paris, there's a buzz around low-carbon office spaces, but demand is outstripping supply. By 2030, the city is expected to face a significant shortfall in these sustainable properties. This isn't just a Parisian issue; globally, only 34% of the future demand for low-carbon workspaces is expected to be met.
People are willing to pay more for these green spaces. In North America, tenants are shelling out an average of 7% more for sustainable offices. Over in Asia Pacific, it's about 10%, and in London, the premium jumps to over 11%.
These higher rents are not just about being green; they reflect higher occupancy rates and historic rental highs for low-carbon prime office spaces. Even as the commercial real estate sector slows down, these eco-friendly spaces are thriving.
Sources: JLL, JLL Research, World Economic Forum
8) More foreign buyers will enter the Paris real estate market as the euro weakens
The weakening euro has historically led to increased foreign investment in Paris real estate. For example, during previous periods of euro weakness, international buyers accounted for a higher percentage of transactions, such as in the Alpes-Maritimes region where their share rose from 9% in 2021 to 13% in 2024.
Current exchange rate trends have made French real estate more affordable for non-eurozone buyers. In Q1 2024, the average price per square meter in Paris dropped to €9,490, reflecting a return to late 2018 levels. This price drop, combined with favorable exchange rates, has slightly increased the purchasing power of international buyers, allowing them to afford larger properties.
Real estate agencies have reported a rise in inquiries from foreign buyers since January 2024. This increase is driven by reduced mortgage interest rates and the relative political stability in France, making Paris an attractive destination for international investors.
Sources: Adrian Leeds, Global Property Guide
We did some research and made this infographic to help you quickly compare rental yields of the major cities in France versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
9) Rental prices in high-demand areas will stabilize due to stricter rent control policies
Stricter rent control policies can stabilize rental prices in high-demand areas.
Imagine living in a bustling neighborhood where everyone wants to be. With rent control, even if the area becomes more popular, rents can't skyrocket beyond a set limit. This keeps housing affordable for more people.
Take Paris, for instance. Since 2019, their rent control scheme has been in place, and average rent increases have dropped by 4.2% compared to areas without such controls. This shows how effective these policies can be in keeping prices from rising too fast.
Rent control also means less price volatility. Instead of rents jumping up and down every month, prices stay more stable, which is a relief for both tenants and landlords. In Paris, studies indicate that without these controls, average rents would have been higher, proving their effectiveness.
For those considering buying property in the country, understanding these dynamics is crucial. Rent control can make a neighborhood more attractive by ensuring that rental prices remain predictable and manageable.
Sources: Apur, NSS Magazine, French Property
10) Short-term rental returns will drop as stricter rules hit platforms like Airbnb
In recent years, stricter regulations have been introduced for short-term rentals in Paris, significantly impacting platforms like Airbnb. The French government has implemented measures such as mandatory online declarations for all short-term rentals starting in 2025. This means that every property listed for short-term rental must be officially registered, adding a layer of bureaucracy for property owners.
The Loi Le Meur, passed in May 2024, has further tightened the rules by addressing tax loopholes and proposing harsher fines for non-compliance. For instance, the maximum fine for illegally renting out second homes has doubled to €100,000. This increase in penalties is designed to deter illegal short-term rentals and ensure compliance with the new regulations.
As a result of these regulations, there has been a noticeable decline in Airbnb listings in Paris. Data from AirDNA shows that active listings dropped by 3.2%, and overall listings fell by 23% from February 2020 to February 2021. This trend is part of a broader shift away from larger cities like Paris, driven by both health concerns and the impact of strict regulations.
Sources: Paris Rental, Short Term Rentalz, Enso Connect, 56 Paris
11) Demand for sustainable properties will rise due to new tax incentives for eco-friendly buildings
France is rolling out enticing tax incentives to boost green energy investments.
In 2023 and 2024, the French government introduced the Green Industry Investment Tax Credit (C3IV), offering financial perks for eco-friendly renovations. This move is part of a broader push to make sustainable living more attractive and affordable.
Paris is leading the charge in sustainable development, with a surge in eco-friendly building projects. The city's Plan Climat Energie Territorial (PCET) sets ambitious targets to cut emissions and energy use, reflecting a growing local demand for greener living spaces.
One standout example is the Athletes’ Village for Paris 2024, which showcases impressive carbon footprint reductions. This project aligns with France’s “RE2020” regulation, highlighting the shift towards sustainable construction practices.
Parisians are increasingly aware of the benefits of sustainable living, which is driving higher demand for eco-friendly properties. This trend is not just about environmental responsibility but also about enjoying the financial benefits of energy-efficient homes.
With these new tax incentives, the market for sustainable properties is expected to grow, making it a smart time to invest in eco-friendly real estate.
Sources: Investment Policy Monitor, JLL Canada, OECD Cogito
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12) Luxury properties in Paris's 6th arrondissement will attract foreign investors because of its prestigious reputation
The 6th arrondissement in Paris is a hotspot for foreign investors eyeing luxury properties.
With its prestigious reputation, this area boasts average property prices of €14,000 per square meter, making it one of the priciest in the city. The Saint-Germain-des-Prés area, in particular, is a magnet for international buyers who are drawn to its charm and exclusivity.
Even though Parisian real estate prices saw a slight dip in 2023, the luxury market in the 6th arrondissement has stayed strong. This resilience is a key reason why foreign investors continue to focus on this central neighborhood.
The 6th arrondissement is not just about high prices; it’s steeped in cultural and historical significance. Picture yourself strolling through its picturesque alleyways, sipping coffee in literary cafés, or shopping in designer boutiques. This unique blend of culture and history adds to its allure.
Living here means being close to iconic spots like the lush Luxembourg Garden and the magnificent Saint-Sulpice Church. These landmarks enhance the district's appeal, especially for those who appreciate a mix of history and modern luxury.
For those in the know, the 6th arrondissement is more than just a place to live; it’s a lifestyle choice that combines prestige, culture, and exclusivity, making it a top pick for luxury property investments.
Sources: Parlez Moi de Paris, Propriétés Parisiennes Sotheby's Realty, Paris Discovery Guide
13) More Asian buyers will invest in Paris, especially in the 1st arrondissement
Asian buyers are expected to increase their presence in the Paris market, particularly in the 1st arrondissement, due to several compelling reasons.
Firstly, the wealth and investment interest from Asian countries, especially China and South Korea, have been on the rise. This trend is driven by increasing economic stability and growing middle-class wealth, which encourages more investment in international property markets. In the past, Chinese investors have shown renewed interest in French real estate, with transactions growing by 5% compared to 2023. This indicates a strong potential for continued investment in Paris.
Additionally, the 1st arrondissement is particularly attractive to Asian buyers due to its stable and prestigious real estate market. Paris, with its iconic architecture, historic landmarks, and cultural significance, fits the criteria that Asian investors are seeking. The presence of international schools and cultural amenities in this area also appeals to Asian families, suggesting a growing expatriate community that could drive real estate demand.
Moreover, media reports have highlighted Paris as a desirable location for Asian investors, emphasizing the city's unique blend of culture, cuisine, and scenic beauty. This, combined with favorable exchange rates, further enhances its appeal. Real estate agencies in Paris are also increasingly catering to Asian clients, recognizing the potential for Asian investment in the market.
Sources: French Real Estate Market Update: 2024 in Numbers and Insights, Asians remain prudent in investing in European property markets, Paris 2024 Games: 11.2 million visitors to Greater Paris
14) Demand for larger homes with flexible layouts will grow as multi-generational living becomes more popular
The trend of multi-generational living is expected to increase the demand for larger homes with flexible layouts. This is because more families are choosing to live together under one roof, which means they need more space to accommodate everyone comfortably.
In 2023 and 2024, we saw a rise in the number of households with three or more adults in France, reaching 5.50% by the end of 2023. This indicates a growing trend towards multi-generational households, where different generations of a family live together. As a result, there is a higher demand for homes that can provide enough space and privacy for everyone.
Additionally, the real estate market in urban areas like Paris has been experiencing an increase in demand for larger properties. Families are looking for homes with adaptable layouts, such as open floor plans or bonus rooms, to meet the diverse needs of all family members. This trend is further supported by architectural designs that include features like separate entrances and dual master suites, making it easier for multiple generations to live together comfortably.
The aging population in France is another factor contributing to this trend. Many older adults are moving in with their children or younger family members to receive care and support, which increases the need for homes that can accommodate these living arrangements.
Sources: INED, EUROSTAT, Sutter and Nugent, FrenchEntrée
We have made this infographic to give you a quick and clear snapshot of the property market in France. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
15) Paris property prices will grow moderately as new developments balance economic uncertainties
Over the past decade, property prices in Paris have generally shown an upward trend, despite a decline in 2023 and 2024. This long-term increase suggests a resilient market that can support moderate price growth.
The number of new residential developments and construction permits indicates ongoing investment in the real estate sector. Although transaction volumes decreased, a slight recovery in property sales in late 2024 suggests market stabilization.
France's stable economic growth rate has positively influenced consumer confidence, which is crucial for the real estate market. The slight decrease in interest rates in 2024 has also helped stabilize the market, making mortgages more affordable and potentially stimulating demand.
Foreign buyers continue to show interest in Parisian real estate, with over 10% of purchases in 2023 made by international investors. This ongoing interest from foreign buyers can contribute to moderate price growth.
Despite economic uncertainties, there is continued interest in premium Paris apartments. The Chamber of Notaires of Paris predicts that while prices may decline slightly, sales are expected to pick up as the market stabilizes, indicating positive buyer sentiment.
The Paris real estate market has shown resilience during past economic uncertainties, such as Brexit and the COVID-19 pandemic. This adaptability suggests that the market can withstand current challenges and support moderate price growth.
Sources: Paris Perfect, Connexion France, 56 Paris
16) Demand for homes with office spaces will rise as more people work remotely
In 2023 and 2024, remote work surged in France, reshaping how people think about their homes.
During the containment period, nearly 30% of the French workforce worked from home, a massive jump from usual numbers. This shift is sticking around, and it's changing what people want in a house.
Remote workers are finding that having a dedicated home office makes life easier. Over 25% of them say it helps balance work and personal life better. As more people work from home, the desire for these spaces is growing.
The need for home office furniture is booming too. In France, the market for this furniture is expected to hit US$1.69 billion by 2029. This rise is tied to more folks setting up home offices.
In Paris, real estate ads are now highlighting home office features to catch the eye of remote workers. Coliving spaces are popping up, offering furnished apartments with coworking areas and other perks for those working from home.
People are looking for bigger homes that can fit a home office, showing a clear trend in housing preferences. This is especially true in urban areas where space is at a premium.
Sources: Statista, Statista, Art of Co, INED
17) Rental yields in central Paris will fall as property prices rise faster than rents
In recent years, rental yields in central Paris have been on a downward trend. This is largely because property prices have been rising faster than rental prices. Even though property prices saw a decline in 2023 and 2024, they are still relatively high, and the expected decrease in 2025 is modest.
For instance, by the third quarter of 2024, the average price per square meter in Paris was 9,500 €/m², which was a decrease from the previous year. However, the Paris Chamber of Notaries predicts that this decline will slow down, with only a slight drop expected by January 2025. This means that while property prices are not skyrocketing, they are still not dropping significantly enough to boost rental yields.
On the other hand, rental prices have not been growing at the same pace as property prices. Historical data shows that rental yields have been declining because rents have not kept up with the increases in property prices. This gap between property price growth and rent growth makes it difficult for investors to achieve high rental yields.
Sources: 56 Paris, Metropolitan Properties Paris, Adrian Leeds
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.