The French real estate market is enduring a period of unprecedented turbulence, marked by a sharp collapse in transaction volumes. In the second quarter of 2026, new housing reservations plummeted by 23.2% year-on-year, totaling only around 19,350 units. This dramatic decline is even more striking when compared to the 42,310 reservations recorded during the same period in 2021. Industry professionals agree that the market has never hit such a low point, rendering any forecasts of short-term improvement obsolete.
At the heart of this downturn, the incentive measures introduced by the executive branch are struggling to gain traction. The "Jeanbrun" scheme, intended to revitalize private rental investment, has fallen well short of expectations, generating fewer than 200 monthly reservations against an initial target of 4,000. Faced with this failure, the government has been forced to admit that meeting the ambitious goal of two million new or renovated homes by 2030 will likely be impossible, highlighting a structural weakness in housing policy.
The situation is further exacerbated by a restrictive monetary environment, illustrated by the recent decision of the European Central Bank (ECB) to raise its key interest rates by 0.25 points, bringing the deposit rate to 2.50%. This credit-tightening policy automatically leads to an increase in borrowing rates for households, which now range between 3.50% and 4.20% depending on the borrower's profile. This erosion of real estate purchasing power is drastically limiting the borrowing capacity of individuals, thereby restricting access to homeownership for a large portion of the population.
Beyond the price drops observed in the existing property segment, the sector is facing a long-term supply crisis. With a marked decrease in the number of building permits issued, the shortage of new housing is becoming entrenched. Far from a simple temporary adjustment, experts fear a deep structural crisis characterized by a persistent housing shortage and mounting pressure on rental markets in major cities, with potentially severe social consequences for the years to come.