A Turning Point Confirmed: Buyers Return, Prices Stabilize, and Paris Gains Global Investor Attention
The Paris real estate market is showing clear signs of transition as we enter the summer months. After two years of correction, May 2025 confirms a shift in sentiment — from cautious observation to renewed activity. Boosted by easing monetary policy, stabilizing interest rates, and increased foreign investor interest, Paris seems poised for a new investment cycle.
ECB Rate Cuts Begin to Influence Borrowing Conditions
Following the European Central Bank’s sixth consecutive rate cut in April — bringing the deposit rate to 2.25% — lenders across France are gradually adjusting their credit policies. While French mortgage rates remain above pre-crisis levels, the average rate has softened to 3.04% in May (source: Crédit Logement/CSA), and the best borrower profiles are securing financing below 2.9% over 20 years.
This evolving financial environment is key to unlocking Parisian demand. As credit becomes more accessible, buyers — particularly international ones — are increasingly returning to the market to take advantage of this brief convergence of lower prices and improving loan conditions.
Transaction Volumes Continue to Rise in Île-de-France
New data from the Notaires de Paris confirm that transaction volumes are up by 12% year-on-year across the Île-de-France region (Feb–Apr 2025 vs. same period in 2024). Paris intramuros shows a +6% rebound, while suburban markets — especially those with strong transport links — see double-digit growth.
This rebound is driven by:
- A stabilization of prices at attractive levels
- Improved buyer confidence
- Anticipation of future price increases as demand outpaces limited supply
Property Prices: A Market Reaching Equilibrium
As of May 2025, the average price per square meter in Paris stands at €9,450, marking a 10.9% decrease over two years — a correction that has restored access to certain neighborhoods for middle- and upper-middle-class buyers.
Affordable Arrondissements Still Offer Value:
- 19th arrondissement: €7,590/m² (–4.3% YoY)
- 20th arrondissement: €8,080/m² (–1.4%)
- 12th arrondissement: €8,410/m² (–3.0%)
- 18th arrondissement: €8,380/m² (–4.6%)
These areas continue to attract first-time buyers and investors seeking long-term appreciation, thanks to ongoing urban renewal, cultural vibrancy, and relative affordability.
Premium Districts Maintain Stability Despite Price Corrections:
- 6th arrondissement: €13,460/m² (–2.8% YoY)
- 7th arrondissement: €12,420/m² (–5.8%)
- 4th arrondissement: €12,390/m² (–5.2%)
- 1st arrondissement: €12,180/m² (–10.1%)
Despite recent declines, these prestigious locations remain sought-after by international buyers for their architectural charm, institutional stability, and low rental vacancy.
Rising Stars:
- 8th arrondissement: €11,760/m² (+4.7%) — boosted by luxury retail and diplomatic activity
- 13th arrondissement: €8,530/m² (+2.3%) — driven by infrastructure projects and urban regeneration
International Investment Interest Surging
The momentum of the Choose France 2025 initiative — with €20 billion in foreign investments announced — is also boosting confidence in French real estate. As investors diversify beyond equities and technology, real assets like residential and mixed-use property in Paris are gaining new attention.
Paris remains one of the few global cities offering:
- A stable legal and tax environment
- High demand for rentals in central areas
- Liquidity in prime markets
- A strong connection to international business, culture, and politics
For family offices, high-net-worth individuals, and institutional players, this market provides both capital preservation and long-term yield potential.
Outlook: Entering the Second Half of 2025 with Cautious Optimism
If inflation in the eurozone continues to decline and mortgage conditions improve further, we may see a broader recovery in transaction volumes and moderate price growth by late 2025.
For now, however, we are in a moment of rare alignment:
- Prices at a cyclical low
- Financing conditions improving
- Confidence on the rise
At CAYMA Real Estate, we are observing a sharp uptick in demand from international buyers looking to re-enter the Paris market — not just for lifestyle properties, but for strategic investment opportunities across residential, office, and hospitality assets.
Our view? May 2025 marks a clear inflection point. The Paris real estate market is transitioning from correction to recovery — and savvy investors are already positioning themselves for what comes next.
