Expectations for growth in real estate prices remain moderate…
While prices tended to decline fairly modestly in regions other than in Île-de-France, the drop in prices was more pronounced in the Greater Paris region and in major cities, which had seen the highest growth rates in recent years. Advance contract data from the notary representative bodies in France in general, and in the Greater Paris region more specifically, indicate a gradual rise in real estate prices during the first part of 2025 (+0.4% year-on-year as at the end of May 2025 for France as a whole).
Although a recovery in real estate transactions is a necessary step before prices can rise, the combination of obstacles affecting both supply and demand is expected to keep housing prices in check. By the end of 2025, property prices could increase by a little over 1% year-on-year, though this would conceal significant differences between regions and types of properties sold.
More dynamic new loan production
New home loan production is expected to rebound more significantly, returning to the level it reached in 2023. The recovery in mortgage lending began in mid-2024 after hitting a ten-year low in March 2024, with €7.7 billion in new loans (excluding refinanced and renegotiated loans). Lenders are forecasting an increase in mortgage applications in the first half of 2025. The use of credit to finance home purchases is set to rise and approach its long-term average (80% of all transactions). As the market returns to more typical behavior, the modest increases in both prices and transactions should result in a more substantial rise in lending, with a projected 16% increase compared to 2024. New loan volumes in 2025 are expected to reach around €140 billion, similar to 2023, while the volume of refinanced and renegotiated loans is projected to rise slightly year-on-year to €30 billion, thanks to slightly lower interest rates
This period has also seen a change in borrowers’ profiles. The number of homes bought on credit by first-time buyers has been rising since 2015 and, since 2022, has exceeded the number of transactions by repeat buyers. With nearly 44% of all credit-financed transactions, first-time buyer loans now hold the leading position. Meanwhile, the number of homes purchased on credit by second-time buyers has dropped significantly, with more opting for cash purchases instead.
First-time buyers: what support for the real estate market?
The 19th wave of the BPCE L’Observatoire-Audirep Barometer survey makes it possible to identify the population of first-time buyers, defined as individuals who state that they do not own their primary residence and who have plans to purchase a home within the next 12 months.
Profile of first-time buyers
Who are they? Their average age is 35 (compared to 48 for all French respondents), and 54% are women (versus 52% among the general population). They are more likely to live in the Paris region (25% vs. 18%) and are employed (78% vs. 60%). Both their income and financial assets are lower. Additionally, 54% currently live in an apartment (vs. 38%), and 52% live in households of at least three people (vs. 45%). Apart from these socio-demographic characteristics, they also distinguish themselves by their attitudes and increasing worries over recent years: 27% have a pessimistic view of the future (+13 points compared to 2022), and two-thirds are concerned about public debt (+7 points) and their future pension levels (+11 points).
What are their real estate projects? In three out of four cases, they are looking to buy their main residence (vs. 58% among all those with a purchase project). In 76% of cases, the future home would be located outside the Paris region (as with all buyers) and, in 40% of cases, in a small or medium-sized town (vs. 32% of buyers).
How is their project financed? First-time buyers accounted for 41% of new loans in 2024. 85% of them planned to take out a loan to finance their purchase (vs. 81% of buyers). The average loan term was 23.5 years (vs. 22.2 years) with a down payment of 18% (vs. 22%). First-time buyers are particularly sensitive to PTZ interest-free loans: 71% of them say that being able to benefit from this scheme would encourage them to go ahead with their plans to buy a main residence (vs. 50%)..
41%
The share represented by first-time buyers in new loan production in 2024