The rental market in France will be truly dynamic in 2025, driven by strong growth in demand. This trend is largely fuelled by the increasing barriers to home ownership, particularly the rise in interest rates between 2023 and 2024. Faced with the increasing complexity of buying a property, many households, particularly the younger generation and first-time buyers, are turning to renting, putting significant pressure on the rental market.

Since 2023, interest rates on mortgages have risen significantly, limiting access to home ownership for many French people. As a result, households whose borrowing capacity is limited by the central banks' restrictive monetary policy are being forced to rethink their property plans. Buying a house or an apartment is becoming increasingly difficult, especially for young people and first-time buyers, who are the hardest hit by this trend.

This situation, while restrictive for some, has had an unexpected effect on the rental market. Faced with the impossibility of becoming homeowners, many households are turning to renting, fuelling a demand that often outstrips the available supply, particularly in major cities and their suburbs. This phenomenon is contributing to a significant increase in rents, at a time when the profitability of renting is becoming a major issue.

Increased rental demand is reflected in rising rents, which are reaching record levels in France's major conurbations. Cities such as Paris, Lyon, Marseille, Toulouse and Bordeaux and their surrounding suburbs are becoming increasingly attractive. This trend is largely driven by urban depopulation, with many residents of smaller towns and cities seeking to move closer to the major conurbations for employment or quality of life reasons.

Rents in these areas are rising significantly, attracting more and more investors looking to capitalise on this sustained demand. Indeed, in an environment where returns on other forms of investment are less certain, buy-to-let is becoming a favoured option for investors seeking profitability.

Another key factor that has boosted the rental market in 2025 is the organisation of the Paris 2024 Olympic Games. This global event has not only increased rental demand in the short term due to the influx of tourists, journalists and participants, but has also had a long-term impact on property.

The Olympic Games have accelerated the process of renovation and redevelopment in certain areas of Paris and the towns surrounding the Olympic venues, such as Saint-Denis, Le Bourget and Créteil. These projects have helped to improve the urban infrastructure and quality of life in these areas, making them more attractive to property investors. As a result, property prices in these areas have risen significantly, supported by growing rental demand.

As a result, some historically less popular areas have seen their property markets revive thanks to the 'Olympics effect', creating a favourable environment for rental investment.

Despite an economic environment characterised by inflation and rising interest rates, property investment will continue to be seen as a safe haven in 2025. Against a backdrop of financial uncertainty, property remains one of the safest and most stable investments. Although access to credit is more restrictive, many investors continue to favour property as a means of protecting their savings.

The rental market offers attractive yields, particularly in major cities and suburban areas close to major economic centres. What's more, with the prospect of a gradual normalisation of interest rates over the next few years, some analysts are predicting a recovery in the property market, fuelled by renewed access to credit and a return of investor confidence.

In 2025, rental demand will remain strong, mainly due to the increasing difficulty of accessing home ownership and the growing attractiveness of major metropolitan areas. The Paris 2024 Olympics have also played an important role in increasing the attractiveness of certain areas, while generating an influx of visitors that has helped to boost the rental market. Against this backdrop, rental property appears to be a safe haven for investors, despite tensions over access to credit. However, with the rental market under pressure, prices may continue to rise in the coming years, raising the expectations of both owners and investors.