French real estate faces growing difficulties

The French real estate market is encountering increasing difficulties, according to Véronique Bédague, CEO of Nexity, one of the country's largest property developers. Rising fuel prices and ongoing inflation are contributing to the challenges, with first-time homebuyers facing higher costs of living.

Rising interest rates impact mortgages

The interest rate on French ten-year government debt has climbed above 5%, and mortgage loan rates, which are closely tied to these government debt rates, are now between 3.2% and 3.5%. Experts predict these rates will surpass 4% by early 2027, further complicating the housing market.

Decline in housing reservations

Housing reservations made by individuals between January and September have dropped by 10% compared to the same period in 2025, totaling 3,094 homes. Sales to first-time homebuyers have fallen by 18%, while sales to individual investors have seen a slight 1% increase.

Nexity reports significant sales drop

In the third quarter of 2026, Nexity received 1,536 reservations, a 46% decrease compared to the same quarter the previous year. Sales to individuals have dropped by 12% for the quarter, significantly less than the overall market decline.

Market at a low point

Bédague explained that the real estate market is at a low point, which will be a bit lower and longer than expected in 2025. She anticipates the downturn will likely continue until after the presidential election, adding uncertainty to the sector.

Nexity reviews non-real estate activities

In response to the ongoing housing crisis, Nexity has launched a review of its activities outside of real estate promotion to determine if certain operations should be sold. New job cuts are not ruled out to align the company with current activity levels.

Cost-cutting efforts continue

For Bédague, reducing costs is crucial, especially to lower home prices and remain competitive. In 2024, Nexity implemented an employment safeguard plan (PSE) involving 500 job cuts, including 227 layoffs, and a business divestiture plan to reorganize in response to the crisis.

Company confirms 2026 goals

Despite a 17% decrease in revenue for the first nine months of 2026, Nexity has confirmed its annual goals. The company remains committed to navigating the current challenges while maintaining its strategic objectives.