Marc Touati argues that French housing prices will keep falling into 2026 because higher interest rates, rising inflation, and worsening demographics all point to weaker demand and tighter credit.
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In this short market commentary, Marc Touati presents a bearish outlook for French housing, focusing on the market for existing homes in metropolitan France. He says prices have already fallen about 5% from the 2022 peak by Q4 2025, with some cities such as Paris down around 10%, but he frames this as only a limited correction so far rather than a full adjustment. His central near-term argument is that housing prices move inversely with interest rates: when rates rise, prices tend to fall, and he says rates are now moving higher again, implying further downside for real estate in France. He adds a second cyclical driver: inflation, which he says is likely to rise toward 4%, and he links higher inflation to weaker housing prices via the historical relationship shown in his charts. …
Tactically bearish for French housing: the setup looks vulnerable if rates keep firming and inflation re-accelerates, with credit conditions likely to tighten further. The immediate risk is continued price drift lower rather than a quick stabilization.
Over the next few months, the base case is a slow continuation of the correction from the 2022 peak, led by affordability pressure and weaker transactions. A change in view would require rates to stop rising and inflation to stay contained.
Structurally, the thesis is that French housing faces a worse demographic backdrop than in prior cycles. If births remain below deaths, long-run demand growth slows and property prices may face a lasting headwind even after the rate cycle turns.
French existing-home prices are down about 5% from their 2022 peak as of Q4 2025.
He says the market is already in a downward phase and quantifies the drop from the peak.
Some local markets, such as Paris, are down around 10%.
He cites Paris as an example of a deeper decline than the national average.
Rising interest rates mechanically push real-estate prices lower, while falling rates tend to lift them.
This is the central causal claim linking rates to housing prices.
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