The French real estate market is undergoing a correction phase that is reshuffling the cards among investor profiles. The price adjustments that have started over the past two years, combined with the gradual decrease in the ECB’s key rates, create a technical entry point that we haven’t observed in a decade. Investing in real estate in 2024 requires mastering three simultaneous parameters: the real cost of credit, energy constraints, and the yield differential between regulated and unregulated areas.
EPC and the depreciation of energy-intensive properties: the real negotiation lever
Properties classified as F or G in the energy performance diagnosis suffer from structural depreciation. The gradual ban on rentals (G from January 2025, F scheduled for 2028) is pushing some landlords to sell quickly, often below the local market price.
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We observe that this regulatory constraint generates an influx of properties onto the secondary market, with sellers reluctant to finance the renovations themselves. For an investor with a calibrated renovation budget, the EPC depreciation finances a significant part of the energy renovation. The calculation is done on a case-by-case basis: attic insulation, heating system replacement, mechanical ventilation. Each item modifies the EPC letter and thus the future rental value of the property.
Before positioning yourself on this type of acquisition, it is possible to view the offers on Alias Immo to identify properties whose depreciation covers the budget for bringing them up to standard.
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A common pitfall: underestimating the cost of moving from an EPC G to an EPC D. Quotes vary significantly depending on the configuration of the building (old co-ownership, individual house, rental building). A prior energy audit remains the only reliable way to estimate the operation.
Net rental yield in unregulated medium-sized cities
Net profitability is declining in regulated metropolitan areas and remains stable in medium-sized cities. The Bank of France and the OFCE highlighted in their 2024 analyses that the combination of rent control and rising compliance costs reduces the appeal of large urban areas for private investors, even though gross profitability remains at acceptable levels there.
The Century 21 / Guy Hoquet barometer confirms a gradual shift of investors towards urban areas where neither rent control nor the capping of tax incentives cut into yields. These medium-sized cities share several common characteristics:
- A diverse job market (presence of a university hospital, a university, or a tertiary activity zone) that supports long-term rental demand
- A sufficiently low price per square meter so that the monthly rent covers the loan payments without excessive saving effort
- An increasing rental tension, linked to households moving away from metropolitan areas that have become too expensive to buy or rent
We recommend systematically comparing net yield (after property tax, non-recoverable charges, PNO insurance, and provision for rental vacancy) rather than the gross yield displayed in listings. The gap between the two often exceeds two points.
Mortgage credit: balancing between fixed rates and borrowing capacity
The decrease in key rates initiated by the ECB is gradually reflected in the rates of French banks. Financing conditions are improving quarter after quarter, but the level reached remains higher than that of the 2015-2021 period.
The arbitration is less about timing (waiting for an additional decrease or buying now) than about the structure of the financing. A 20-year fixed-rate loan remains the norm in France, but the loan duration directly affects the monthly cash flow of the rental operation.
Two parameters to monitor before signing a loan offer
The usury rate, first: recalculated quarterly by the Bank of France, it determines the legal ceiling for the APR. If your borrowing profile presents a perceived risk (variable income, low contribution), the proposed rate may approach the usury threshold and block the arrangement.
The amortization deferral, next. For a property requiring energy renovation work, negotiating a partial deferral of six to twelve months allows you to only repay the interest during the construction phase. The deferral preserves cash flow during the months without rental income.
SCPI or direct rental investment: two distinct asset management logics
SCPI (real estate investment companies) and direct rental investment do not serve the same asset management objectives. Comparing their gross yields without considering liquidity, taxation, and the level of investor involvement makes no sense.
The SCPI pools rental risk but removes any leverage for value creation through renovations or price negotiation. The direct investor retains control over these two levers, at the cost of a heavier operational commitment (rental management, maintenance, potential litigation).
- Passive profile with available capital: the SCPI offers exposure to the real estate market without daily management, with an accessible entry ticket
- Active profile with borrowing capacity: direct rental investment allows leveraging credit and capturing the capital gain linked to renovations
- Mixed profile: combining an SCPI pocket in life insurance (softened taxation) and a property directly financed by credit remains a coherent strategy to diversify income sources
The choice between these two vehicles depends less on the displayed yield than on the actual availability of the investor and their holding horizon. A direct rental investment held for less than eight years rarely generates the expected performance, once notary fees and capital gains tax are factored in.
The 2024 market offers a technical window of opportunity, driven by price correction and improved credit conditions. The EPC constraint, far from being a hindrance, becomes a selection filter for investors capable of budgeting for renovations. Investing in real estate this year requires calculating net, not gross, and prioritizing locations where rental demand remains resilient without regulatory support.