The French real estate market in 2024 recorded its lowest activity level in several years, marking a third consecutive year of declining sales. Prices have fallen in many regions, credit rates have begun to decrease after months of increases, and energy regulations have tightened their requirements for landlords. What indicators can help distinguish the promising segments from the risky areas for real estate investment in 2024?
EPC and energy decency: the criterion that redistributes the value of rental properties
Most analyses of the real estate market focus on prices and rates. A less visible factor now weighs just as heavily on rental profitability: the EPC label conditions the right to rent. Since January 1, 2025, a property rated G on the energy performance diagnosis is legally considered indecent. It can no longer be subject to a new lease, renewal, or tacit extension.
This prohibition only applies to new contracts. Existing leases remain valid, creating a divide between landlords who have anticipated renovation work and those who let their existing leases run. For a buyer, this means that a property rated G listed at a reduced price may represent an opportunity, provided that the budget for compliance work is allocated before any rental.
The data published on the Newsyoung website dedicated to real estate allows tracking these regulatory developments applied to the French rental market.
The timeline does not stop at 2025. Properties rated F will be affected by 2028, and those rated E by 2034. Every rental acquisition must include a medium-term energy renovation plan, otherwise the yield will be diminished by periods of forced vacancy or sanctions (rent freeze, work imposed by the judge).
Correction of the EPC for small surfaces: real estate prices and reclassification without work
A relatively unnoticed technical adjustment changes the game for part of the urban rental stock. Since July 1, 2024, the EPC thresholds applicable to properties of less than 40 m² have been corrected. Studios and small apartments were previously over-penalized by the calculation method, which related energy consumption to a reduced area.
Direct consequence: many studios, particularly in Paris, see their label improve by one or two letters without any work being done. A property rated G or F can move to E, thus regaining the right to be rented without restriction.
| Situation | Before correction (July 2024) | After correction |
|---|---|---|
| Studio of less than 40 m² heated by electricity | Often rated F or G (over-penalized) | Possible reclassification to E without work |
| Apartment of more than 40 m² | Unchanged EPC thresholds | No modification |
| Gas-heated housing, small surface | Less penalty than electric | Marginal correction |
For an investor targeting small surfaces in city centers, this correction opens a window: undervalued properties due to their old label can now be legally rented, with a purchase price that has not yet accounted for the reclassification.
Mortgage rates and transaction volume: what the 2024 figures indicate
The volume of real estate transactions reached approximately 775,000 sales in 2024, according to Fnaim, a decline of more than a third compared to the peak in 2021. The contraction was more pronounced in the southwest (Gironde, Haute-Garonne, Pyrénées-Orientales).
The European Central Bank implemented four successive cuts to its key rates during the year, leading to a gradual decrease in mortgage rates. The second half of 2024 marked a stabilization of sales volumes, following a first half that continued the trends of 2023.
- Prices have fallen by about 4 to 5% on average compared to the previous year, with significant regional disparities: some metropolitan areas are holding up better than rural or suburban areas.
- The drop in mortgage rates is restoring purchasing power, but does not fully compensate for the increase accumulated between 2022 and 2023.
- The segment of individual houses has corrected more than that of apartments in city centers, where rental demand supports prices.
However, the stabilization observed in the second half suggests a possible bottoming out. A plateau seems to have been reached in sales volumes, which, historically, precedes a gradual recovery in activity.
Rental investment in France: balancing yield and regulatory compliance
The equation of rental investment in 2024 is no longer just a calculation of gross yield. The energy compliance of the property, its eligibility for rental over the next five to ten years, and the cost of renovation work weigh as heavily as the purchase price or expected rent.
An older apartment in a good location but rated F will require a renovation budget before 2028 to remain rentable. The cost of bringing energy standards up to date must be included in the profitability calculation from the acquisition phase, not afterward. Landlords who neglect this aspect expose themselves to a rent freeze or suspension of payment by the tenant, by judicial decision.
The real estate sales market reflects this tension. Properties with a favorable EPC (A to D) retain their price better. Energy-inefficient properties are negotiated at a discount, sometimes significant, which can be a lever for buyers capable of quickly financing the work.
The year 2024 will have confirmed that the French real estate market now operates at two speeds: on one side, properties compliant with energy requirements, whose value holds, and on the other, a growing stock of housing that is gradually losing its right to access the rental market. The key data to watch in the coming months remains the pace of decline in mortgage rates, the only factor capable of significantly reviving transaction volumes.