The Rental Market in 2024: Warning Signs of a Crisis

The rental housing market in France is currently under significant pressure. With a shortage of properties, rising rents, and regulatory constraints, the situation remains complex for both tenants and landlords. The GH Location Observatory has published a report covering January through September 2024, highlighting the major challenges and trends in this sector.

Supply Declining Amid Rising Demand
The number of rental units available has fallen by 5.2% over the past year, confirming a widespread trend across regions.
• The West is holding up better: Slight increases were observed in Brittany (+1.3%) and in the Pays de la Loire region (+1.2%).
• A sharp decline elsewhere: In the East and South, the decline is more pronounced, reaching -9.5% in Hauts-de-France and -6.4% in Provence-Alpes-Côte d’Azur.
 

This decline in supply can be attributed to several factors:
1. Homeowners discouraged by rising mortgage rates and stricter regulations.
2. A decline in new construction, with an estimated 20% drop over the past year.
3. Renters staying in their current homes longer due to difficulties in becoming homeowners.

A Shift Toward Furnished Rentals
Furnished rentals, which now account for 38% of the rental market, have seen a 7.7% increase over the past year. This type of rental appeals to landlords for several reasons:
• Higher rents.
• Greater flexibility in reclaiming their property.
• Attractive tax benefits.
Conversely, the supply of vacant (unfurnished) housing fell by 11.7% over the same period, with particularly sharp declines in the Île-de-France region (-19.3%).

Rents Are Rising Across the Board
Tight conditions in the rental market are reflected in rising rents, with a national average of 14.6 €/m², up 4% over the past year.
• The most affordable regions, such as Bourgogne-Franche-Comté, have rents of 10.8 €/m².
• Île-de-France remains the most expensive, with an average of 25.6 €/m².
In major cities, rents for furnished housing are consistently more than 20% higher than those for unfurnished housing. In Paris, Nice, and Marseille, increases reached +7.7%, +6.6%, and +6%, respectively.

A Market Forced into a Wait-and-See Mode
Faced with obstacles to buying real estate, many French people are turning to renting, which is increasing pressure on the market. Upcoming new restrictions, such as the ban on renting properties rated G on the Energy Performance Certificate (DPE) starting in January 2025, could further exacerbate the situation. Approximately 755,000 homes would be affected, representing a potential loss of 1.5% of the national rental supply.