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What is happening in the real estate market of South West France? Are property values rising or falling? Is Bordeaux still a prime location for international buyers? How are local government policies and taxes shaping the real estate landscape in 2025?
These are the questions we hear every day from industry experts, potential buyers, and sellers, from Toulouse to Biarritz and beyond. Perhaps you're curious about the same things.
We understand this because we maintain close connections with local professionals and individuals like you, exploring the South West France real estate market daily. That's why we crafted this article: to deliver clear answers, insightful analysis, and a comprehensive view of market trends and dynamics.
Our aim is straightforward: to make sure you feel informed and confident about the market without needing to search elsewhere. If you think we missed the mark or could improve, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll strive to enhance this content for you.
1) American buyers will increasingly target South West France due to favorable exchange rates
In recent years, the exchange rate between the U.S. dollar and the euro has been quite favorable for American buyers. For example, in early January 2025, the exchange rate fluctuated between 0.976 and 0.959, meaning the dollar was strong against the euro. This makes buying property in Europe, including South West France, more affordable for Americans.
Historically, American investors have shown a keen interest in European real estate, especially when the exchange rates are favorable. In 2022, North American investors spent significantly more on European properties than their European counterparts, indicating that a strong dollar can drive American interest in overseas real estate.
Real estate agencies have also reported increased inquiries from American buyers. Agencies like Savills have noted that North American investors are expected to be the largest group investing in European real estate, driven by these favorable exchange rates and attractive investment opportunities.
Economic forecasts suggest that the U.S. dollar will continue to be strong against the euro. For instance, in January 2025, the euro was nearing a two-year low against the dollar. This ongoing strength of the dollar means that American buyers can get more value for their money when purchasing properties in South West France.
2) Property prices in urban centers like Toulouse will steadily rise due to ongoing urbanization
Urban centers like Toulouse are expected to see a steady rise in property prices due to ongoing urbanization. One of the main reasons is the consistent population growth in the city. In 2024, Toulouse's population reached 1,070,750, and it's projected to continue growing, reaching 1,153,440 by 2035. This increase in population naturally leads to a higher demand for housing.
The demand for housing, especially in the apartment sector, has been on the rise, with property prices already increasing in 2023 and 2024. By 2025, the average time to sell a property in Toulouse decreased to just 40 days, indicating a more active market with more transactions happening quickly. This trend suggests that people are eager to buy properties, which can drive prices up.
Another factor contributing to the rise in property prices is the city's booming employment opportunities, particularly in the aerospace and high-tech sectors. These industries have historically driven population growth, attracting more residents to the city. As more people move to Toulouse for work, the demand for housing increases, pushing property prices higher.
Infrastructure development projects also play a significant role. Similar to what has been observed in Lille, where improved transportation links and urban renewal projects have driven up property prices, Toulouse is expected to benefit from such developments. These projects make the city more appealing, potentially leading to higher property values.
Sources: World Population Review, Groupe Mercure, Long Term Rentals in France
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.
3) South West France will see rising demand for accessible housing due to an aging population
The aging population in South West France is a significant factor that will lead to increased demand for accessible housing. In 2030, the proportion of people aged 60 or above in France is expected to rise to 31.1%, up from 20.6% in 2000. This trend is particularly pronounced in less urbanized areas, including parts of South West France, indicating a growing elderly population in the region.
Additionally, life expectancy in France reached record highs in 2023, with women living up to 85.7 years and men up to 80 years. This increase means more people will live longer, potentially requiring homes that accommodate their changing needs as they age.
Moreover, there is a strong preference among older adults to age in place, meaning they wish to remain in their own homes. Government initiatives like MaPrimeAdapt’ support this preference by providing grants for home adaptations, such as installing stairlifts and walk-in showers, which are essential for accessible housing.
Sources: Insee, Connexion France, Connexion France
4) Coastal property prices will rise significantly due to increased demand for holiday homes
Coastal areas in South West France have been experiencing a significant price increase driven by demand for holiday homes. This trend has been particularly noticeable in regions known for their scenic landscapes and historical towns, where property prices have been steadily rising over the past few years. For example, in Bordeaux, property prices have recorded a +10% year-on-year increase since 2015, and in La Rochelle, property prices stood at an average of €5,187 per m² for houses and €6,855 per m² for apartments at the end of 2023.
The tourism industry in South West France is a major driver of demand for both residential and vacation properties. Coastal towns, especially those in the Dordogne valley and along the Atlantic coast, are particularly popular, leading to higher property prices. This demand is further fueled by the growing popularity of remote work, which has allowed more people to live in holiday destinations, increasing the demand for coastal properties.
Additionally, the influx of international buyers, particularly from the USA and the Middle East, has significantly contributed to the surge in property prices. Approximately 70% of buyers in the ultra-prime segment are international, with a significant proportion originating from these regions. This international interest, combined with limited housing supply in popular coastal towns, creates a competitive market where buyers are willing to pay more for desirable properties.
Sources: Long Term Rentals in France, Beauchamp Estates, Tranio
5) Toulouse’s rental market will be significantly impacted by the growing student population
The student population in Toulouse is booming, and it's shaking up the rental market in South West France.
Every year, over 130,000 students, both French and international, head to Toulouse, making it a vibrant hub of academic life. This influx has created a surge in demand for student housing, especially in the city center where everyone wants to be. The buzz around studios and one-room apartments is real, with nearly half of the students eyeing these cozy spaces.
With so many students, rental shortages during the academic year are becoming the norm. This high demand is pushing rental prices up, especially in areas packed with students. It's a golden opportunity for property investors, as these neighborhoods are seeing higher rental yields.
Developers are catching on, and new student residences are popping up to meet the growing need. It's not just about building more; it's about creating spaces that cater to the diverse student body, including international students who bring a global vibe to the city.
Local governments are also stepping up, offering initiatives like online booking platforms and multilingual support to make the housing hunt easier for students from abroad. These efforts are crucial in ensuring that the housing market can keep up with the demand.
For anyone considering buying property in Toulouse, understanding this dynamic is key. The student boom is reshaping the rental landscape, offering both challenges and opportunities for investors looking to tap into this thriving market.
Sources: Times Higher Education, Studapart, Top Universities
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6) Buyers will increasingly seek energy-efficient homes due to the shift towards sustainable living
The shift towards sustainable living is significantly influencing buyers to seek energy-efficient homes. In 2024, homes with high energy efficiency ratings, like A and B-rated properties, were sold at premiums of up to 7% compared to less efficient homes. This shows a clear demand for energy-efficient homes.
Government incentives have played a big role in this shift. The "MaPrimeRénov" program, which started in 2020, offers grants to homeowners for energy-efficient renovations. By 2022, over 500,000 grants were given out, showing the government's commitment to sustainable living.
Consumer preferences are also changing. A survey showed that 73% of global consumers are willing to change their habits to reduce their environmental impact. This trend is especially strong in France, where people are becoming more aware of their ecological footprint.
Media focus on energy efficiency and sustainability has increased, making more people aware of the benefits of green homes. This has contributed to the growing demand for energy-efficient homes.
Sources: Adrian Leeds, IEA, Kadence
7) Stricter short-term rental rules will impact holiday home profitability
In 2023 and 2024, stricter regulations on short-term rentals have reshaped the property market in places like South West France.
Local governments, such as in Villefranche-sur-Mer, have introduced strict measures limiting short-term rentals, allowing owners to rent out only one property for a limited time. This change directly affects their ability to earn from multiple properties, making it tougher to profit from holiday homes.
France's new national registration system has made it easier for authorities to track compliance, leading to rising fines and penalties for those who don't follow the rules. Coupled with reduced tax deductions, this has made short-term rentals less financially appealing, pushing many small-scale hosts out of the market.
In urban centers, there's been a noticeable drop in short-term rental listings, which can drive up tourist prices but also limit income potential for property owners. Many are considering shifting to long-term leases, especially in the South of France, where regulations favor renting to permanent residents, further reducing short-term rental profitability.
Compliance costs, like registration and energy efficiency requirements, are adding up, cutting into the net profit for holiday home owners. An analysis would likely show decreased occupancy rates for short-term rentals, as some properties are taken off the market or converted to long-term rentals.
Media coverage highlights the challenges faced by holiday home owners under these new rules. Property management companies are considering expanding into long-term rental management or offering energy compliance services to maintain profitability in this new regulatory environment.
Sources: Connexion France, Rental Scale-Up, Rental Scale-Up
8) Smart home technology will be a major selling feature for properties in South West France
Smart home technology is becoming a key selling point for properties in South West France due to several compelling reasons. First, the adoption rates of smart home devices in France have been on a significant rise. Back in 2023, the market was valued at USD 4.51 billion, and projections show it will reach USD 14.58 billion by 2030. This rapid growth indicates a strong consumer interest and acceptance of smart home technologies.
Additionally, there is a rising consumer interest in energy-efficient and sustainable living solutions. France has set ambitious goals to reduce energy consumption by 40% in 2030, which encourages the adoption of smart home technologies that promote energy efficiency. These technologies help homeowners manage and utilize renewable energy more efficiently, aligning with the country's commitment to sustainability.
Moreover, the French government has been proactive in encouraging energy-efficient home upgrades through laws like the “Loi de Transition Energétique” and “Loi Climat et Résilience.” These laws provide incentives for homeowners to invest in smart home technologies, making it financially attractive to incorporate these features into properties.
Sources: NextMSC, Grand View Research, Baker McKenzie, Mordor Intelligence
We made this infographic to show you how property prices in France compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
9) UK buyers will boost their presence in the South West France market after Brexit
In recent years, we've seen a notable increase in inquiries and purchases by UK buyers in South West France. This trend is largely due to changes in French law that now allow British second home owners to stay for up to six months without needing additional visas. This simplification of travel has made it easier for UK buyers to consider investing in the region.
Real estate agencies have reported a growing interest from British buyers, with agencies like Fine & Country expressing optimism about the market's future. This optimism is supported by the fact that British customers still make up a significant portion of foreign property buyers in France, representing nearly one-fifth of all such transactions. This ongoing presence suggests that UK buyers are maintaining, if not increasing, their interest in the French property market.
Additionally, the easing of travel restrictions and favorable exchange rates have made French properties more attractive to UK buyers. These factors, combined with the lifestyle appeal of South West France, are likely to encourage more British expatriates to relocate and invest in the region. The charm and quality of life in South West France continue to be significant draws for UK buyers.
Sources: SnowOnly, Long Term Rentals in France, Fine & Country
10) New inheritance tax laws will affect property transfers and investments
Changes in inheritance tax laws can significantly impact property transfers and investments, especially in regions like South West France. When tax laws are adjusted, such as the increase in the tax-free allowance for children in 2020, it can make it more attractive for families to transfer properties to their heirs. This is because the financial burden of taxes is reduced, allowing more wealth to be passed on without incurring heavy tax penalties.
Statistics from past years, like those from 2023 and 2024, show that when tax-free allowances are increased, there is often a noticeable rise in the number of properties transferred through inheritance. This suggests that families are more willing to pass on their properties when they can do so with fewer tax implications. Additionally, surveys conducted among property owners and investors have indicated that favorable tax laws can influence their decisions to buy or sell properties, further affecting the property market.
Moreover, expert opinions and forecasts from real estate analysts have highlighted that changes in inheritance tax laws can alter estate planning strategies. This means that individuals may choose to invest in properties with the intention of passing them on to their heirs, knowing that the tax implications are more favorable. Such changes can also attract foreign investors who are looking for tax-efficient ways to invest in property markets.
Sources: CJ Finance, IFS, French Entree
11) Asian investors will start exploring opportunities in South West France’s real estate market
Asian investors are increasingly exploring opportunities in the South West France real estate market due to several compelling reasons.
Firstly, there has been a growing interest in European real estate among Asian investors. Although they have been cautious, the resilience of sectors like multifamily housing has attracted their attention, suggesting a potential expansion into regions like South West France. Additionally, the success of Asian investments in other parts of France, such as the Alpes-Maritimes and Provence, sets a precedent for exploring new opportunities in South West France.
Moreover, the rising disposable incomes and wealth accumulation in Asian countries provide the financial capacity needed for such investments. Favorable exchange rates further enhance the attractiveness of European investments, including those in South West France. Improved air connectivity between Asia and Europe, with Paris as a major hub, also plays a crucial role in facilitating these investments.
Furthermore, cultural and educational ties between Asia and France, along with increasing tourism from Asia to South West France, contribute to a growing awareness and appreciation of the region's real estate market. Media coverage highlighting the appeal of South West France as a real estate destination adds to this interest.
Sources: Adrian Leeds, Savills, TTGmice
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12) Urban rental yields will stay stable with consistent demand
Urban areas in South West France, like Toulouse and Bordeaux, have shown stable rental yields due to consistent demand. In the past, cities like Marseille and Bordeaux have boasted high rental yields, with Marseille at 5.13% and Bordeaux at 4.34%. These figures highlight the strong rental market in these urban areas.
Consistent population growth has been a key factor in maintaining demand. For instance, Bordeaux experienced a significant population increase, adding 18,000 inhabitants annually in 2021. This growth trend has continued, ensuring a steady demand for rental properties.
Employment opportunities also play a crucial role. Toulouse, known for its aeronautics and space industries, attracts students and professionals, contributing to a stable rental market. Similarly, Bordeaux's wine industry has drawn professionals, further boosting demand.
Urban regeneration projects and government investment in infrastructure have enhanced the appeal of city living. Projects like Lyon Confluence and improvements in public transport have made urban areas more attractive, supporting consistent rental demand.
Sources: The Luxury Playbook, Invest in Toulouse, Sacre Blue
13) Traditional stone houses will become more popular for their charm and energy efficiency
In recent years, particularly in 2023 and 2024, there has been a noticeable rise in the demand for homes that offer both historical charm and energy efficiency. Traditional stone houses, with their unique character, have become increasingly popular among buyers who are willing to pay a premium for such authentic properties. This trend is supported by real estate market reports that highlight the growing interest in homes with historical appeal.
Moreover, the energy efficiency of traditional stone houses has been a hot topic in media coverage. Articles and videos have emphasized how these homes naturally regulate indoor temperatures, reducing the need for artificial heating and cooling. This makes them an eco-friendly choice, aligning with the increasing awareness and interest in sustainable living. The use of locally sourced materials in these homes further reduces their environmental impact, promoting a sustainable lifestyle.
Government incentives have also played a role in boosting the popularity of traditional stone houses. The European Union's updated regulations aim for a zero-emission building stock by 2050, encouraging energy-efficient renovations. These incentives benefit traditional stone houses, making them more attractive to buyers looking for energy-efficient options. Additionally, case studies of successful renovations demonstrate how these homes can be updated to enhance their energy performance while maintaining their historical charm.
Sources: Connexion France, Billion Bricks, IEA, Foothills of France, YouTube
14) Interest in properties with gardens or terraces will grow due to the desire for outdoor space
The desire for outdoor space has been a significant driver of interest in properties with gardens or terraces, especially in regions like South West France. In the past few years, real estate listings have shown a marked increase in demand for such properties. For example, luxurious homes with expansive gardens and outdoor living areas have become highly sought after, as seen in listings by agencies like Coldwell Banker Immoba Realty and Bordeaux Sotheby's International Realty.
Moreover, the rising prices of homes with outdoor spaces compared to those without further highlight this growing preference. This trend is not just limited to high-end properties; it reflects a broader shift in consumer priorities. Surveys have consistently shown a strong preference for outdoor living areas, and this is expected to continue, as indicated by the projected growth in the outdoor furniture market in France.
Additionally, homeowners have been investing more time and resources into home improvement projects related to gardens and terraces. This is driven by the desire for private outdoor areas that offer relaxation and recreation opportunities. The growth in sales of outdoor furniture and gardening supplies also supports this trend, as consumers prioritize creating comfortable and stylish outdoor spaces.
Sources: Le Figaro Properties, EBD Studios, Statista
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.
15) Rural property prices may dip slightly due to over-supply
In recent years, some rural areas in South West France have been experiencing a slight decline in property prices due to an over-supply of homes. This situation has been influenced by several factors that have shaped the local real estate market.
Firstly, there has been a significant increase in unsold properties in these rural areas. This trend began during the COVID-19 pandemic when many people moved from urban to rural areas, leading to a temporary shortage of available properties. However, as the trend slowed down, the inventory of unsold homes started to build up, contributing to an over-supply.
Additionally, new housing developments in these regions have outpaced the actual demand. This means that more homes are being built than there are buyers, which naturally leads to a surplus. When there are too many homes on the market, prices tend to drop as sellers compete to attract buyers.
Moreover, surveys have shown that potential buyers often prefer urban or suburban locations over rural ones. This preference further reduces the demand for rural properties, exacerbating the issue of over-supply. As a result, property prices in these areas are not increasing as they might in more desirable locations.
Sources: Long Term Rentals in France
16) Rental yields in rural areas will drop as more properties enter the rental market
In South West France, rural rental listings have surged in 2023 and 2024.
With more properties available, rental prices are expected to drop as landlords compete for tenants. This oversupply means landlords might have to lower rents to attract interest.
Adding to this, population numbers in these rural areas are either stagnant or declining. Fewer people means fewer potential renters, which further pressures rental yields.
There's also a noticeable shift in preferences, with younger generations leaning towards urban living. This trend leaves rural areas with even fewer new residents, exacerbating the rental property surplus.
As a result, rural rental yields are likely to decline as the market becomes saturated with available properties.
For those considering buying property in these areas, it's crucial to understand that the rental market dynamics are changing, potentially affecting investment returns.
Sources: Long Term Rentals in France, eSales International
17) Bordeaux will see higher rental yields as more students and young professionals move in
Rental yields in Bordeaux are likely to increase as the city continues to attract more students and young professionals. This trend is supported by several key factors. First, the increasing enrollment numbers at universities in Bordeaux, with a 2.5% rise in undergraduate enrollment in spring 2024, indicate a steady influx of students into the city. This growing student population drives up demand for rental properties, as students typically seek accommodation close to their universities.
Additionally, Bordeaux is experiencing a surge in business activity, with new companies and startups establishing offices in the city. This dynamic environment appeals to young professionals, who are drawn to Bordeaux's strategic location and excellent transport links. As more young professionals relocate to Bordeaux, the demand for rental properties increases, contributing to higher rental yields.
Moreover, the rapid relocation times and competitive rental market in Bordeaux suggest low vacancy rates, further indicating high demand for rentals. The city's investment in infrastructure and public transport improvements, such as the expansion of its tram network, enhances connectivity and makes it easier for young professionals to navigate the city, adding to its attractiveness.
Sources: NSC Research Center, Rail Journal, Long Term Rentals in France
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.
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