Soaring New Home Prices: A Continuing Saga in France
Drop in housing prices persist in these five prominent urban areas:
Despite finally finding some stability in 2024, the average price of new homes has commenced a fresh uptrend in the initial quarter of 2025, as per the Real Estate Promoters Federation. Contrastingly, the average cost of a three-bedroom apartment has descended in half of the top 10 urban centers in France, according to the broker Empruntis.
"Emmanuel Macron crying over expensive housing in France? Well, we're screaming the same!", Pascal Boulanger, the head of Real Estate Promoters, vented during a quarterly business meeting on May 15th. The sudden spike in the average price of a new apartment in Q1 2025 saw a 1.5% increase, reaching €5,197 per square meter. This rise occurred despite a notable decline in new home sales, down by 10.3% in Q1 2025 compared to the same period in 2024.
"Previously, governments, before Barnier and Bayrou, were banking on a 15% drop in new home prices following the slump in sales due to surging mortgage rates. But no, prices don't go down in new construction because of a shortage of land, building permits, regulations, and more regulations, plus construction costs!"*, Boulanger lamented.
Mortgage Payments: The Crux of Buying a New T3 in 2025
Significant price disparities across cities
The spike in the average price of new homes masks "significant local price disparities", as highlighted by the Real Estate Promoters Federation. Empruntis and Trouver-un-logement-neuf, in a semiannual study published on May 14th, reported that in the top 10 urban centers of France, half still experience a decrease in prices.
For instance, in Lyon, the fall in the cost of a three-bedroom apartment, a standard real estate metric, has dropped below €400,000 over the past six months, thanks to a 2.3% decrease. Prices have also declined similarly in Nantes, where they skyrocketed during the health crisis and continue to stagnate today, with an average price down 2.4%.
Efforts to revive the market are not without challenges, "the average promoters' margin dropping to 5% from the previous government's expectation of 30%", Boulanger added, suggesting that "many operations are coming out today with negative margins."
Marseille witnesses a symbolic drop, while Toulouse is even more affordable, with an average price below €300,000 for a T3 apartment, down 3.1%. However, users should beware of substantial price differences depending on the districts and arrondissements in Marseille.
Estimating Monthly Mortgage Payments for T3 in Major Cities
To calculate the monthly mortgage payment for buying a new T3 in France's major cities in 2025, various elements come into play:
- Mortgage Rates: Interest rates are usually lower today compared to previous years, contributing to a market recovery.
- Property Prices: French real estate prices vary greatly across major cities. For example:
- Paris:Prices are typically higher with a T3 averaging between €600,000 and €1 million.
- Lyon: Prices might be more affordable, ranging from €250,000 to €450,000.
- Marseille: Prices could range from €150,000 to €300,000.
- Down Payment: A 20% down payment is standard but can differ based on individual conditions.
- Loan Term: The nominal term is usually 20 years, but can extend to 25 years or beyond.
- Interest Rate: With easing mortgage rates, let's consider an average interest rate of 2.5% for simplicity.
Using these factors, you can estimate monthly mortgage payments by applying these calculations. For instance, assuming average property prices, down payments, interest rates, and loan terms, the monthly payment for a new T3 in France could be approximately €1,240. This figure can fluctuate based on specific property prices, interest rates, and loan terms available at the time of purchase.
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Around this article
- Real estate prices
- New real estate
- Real estate purchase
- Real estate investment
- New homes
- The upsurge in new home prices, particularly as seen in Q1 2025, presents a challenge for those planning to invest in real estate, as the average price of a new apartment reached €5,197 per square meter.
- Although the average cost of a three-bedroom apartment has decreased in half of the top 10 urban centers in France, the significant price disparities across cities make it necessary for potential investors to carefully consider their financing options and the locations of their investments.
