France Residential Real Estate Statistics

France’s Real Estate Landscape

The Residential Real Estate market in France, projected to reach $21.33 trillion by 2024, has been experiencing significant growth and development in recent years. With an expected annual growth rate (CAGR) of 2.79% from 2024 to 2028, the market volume is anticipated to increase to $23.81 trillion by 2028. However, as demand for housing continues to outpace supply, the shortage of housing in France remains a key issue. In 2023, France had approximately 38 million registered homes for a population exceeding 67 million people, highlighting the urgent need for more housing units to accommodate the growing population. 

The number of households in France is projected to grow by 1.7% during the forecast period, reaching 29.8 million by 2027. Single-parent households are expected to be the fastest-growing household type between 2022 and 2027, with an anticipated increase of 4.7%. 

Urbanisation in France is expected to rise, with 83.7% of all households situated in urban areas by 2027. However, the rate of urbanization is set to slow down, with the proportion of urban households rising by only 1.3 percentage points between 2022 and 2027. In Western Europe, the urban population has steadily grown over the past decades, particularly in towns and suburbs, leading to the expansion of residential areas around existing cities. While Paris is the largest city in France, accounting for 18% of the population in 2022, Rennes is forecasted to be the fastest-growing city, with its population expected to increase by 1.9% between 2022 and 2027.

Type of Housing

In France, the most common type of housing is single-family homes. An average household lived in a detached house with five or more rooms, with the most common size of dwelling was 60 to 69 square meters.

Housing Supply & Regional Variations

In 2023, the construction of housing units in France reached an all-time low, with fewer than 290,000 new homes being started. This significant decline in construction activity has resulted in an estimated shortfall of 160,000 homes for the year, further exacerbating the already critical shortage of housing in the country. 

Average House Pricing

This lack of supply is driving house prices higher, contributing to rising prices and worsening affordability, as reflected in the upward trend of the house price index.

Paris, Lyon, and Brodeaux are the most expensive cities for residential real estate in France. Additionally, population density in Paris is increasing more rapidly than in other French cities, reaching 987.2 people per square kilometers in 2022. The soaring demand for housing in these major cities has driven up rent and property prices, making affordability a significant challenge.

Opportunities & Challenges

Opportunities

Historically low interest rates have made financing more accessible to homebuyers, further stimulating demand in the residential real estate sector. This increased accessibility encourages more individuals to enter the housing market. Additionally, France’s low home-ownership rate of 63% in 2022 suggests a larger pool of potential homebuyers, further boosting demand.

In major cities like Paris, consistent and robust demand for housing leads to the appreciation of property prices, benefiting property owners and investors. This strong demand also presents significant opportunities for developers and investors to undertake new constructions or renovation projects to meet market needs.

Together, these factors create a favourable environment for investment in the French residential housing market, driven by strong and consistent demand in key urban areas.

Challenges

Limited availability of land and strict regulations restrict new constructions, exacerbating the supply-demand imbalance. This scarcity of new housing developments contributes to rising property prices in urban centers, making it increasingly difficult for first-time buyers and lower-income households to afford homes.

Additionally, rising mortgage interest rates further complicate affordability, as higher borrowing costs reduce the purchasing power of potential homebuyers. Together, these factors create a challenging environment for addressing housing needs and ensuring access to affordable housing for all segments of the population.

Conclusion

Overall, the residential real estate market in France presents a dynamic landscape characterised by significant growth opportunities and formidable challenges. The market demonstrates robust expansion driven by strong demand, particularly in major urban centers like Paris, Lyon, and Marseille. However, the persistent shortage of housing underscores the urgent need for increased development efforts, particularly in these high-demand urban areas.

Sources:

[1] https://www.statista.com/outlook/fmo/real-estate/residential-real-estate/france

[2] https://www.statista.com/study/108507/residential-property-market-in-france/

[3] https://www.euromonitor.com/households-france/report

[4] https://mktgdocs.cbre.com/2299/065371b4-9246-4d02-aa87-304333061ee3-890863417.pdf

[5] https://www.statista.com/statistics/744823/square-meter-price-housing-by-type-france/

[6] https://www.statista.com/statistics/543395/house-owners-among-population-france/