Is this the right time to invest in real estate?
Oct 6, 2025
4 minutes
Wondering if it is the right time to make a rental investment is a question that many investors share. Between rising borrowing rates, recent adjustments in real estate prices, and constant changes in rental taxation, the year 2025 raises as many opportunities as doubts.
Nevertheless, real estate retains a unique status: it remains a safe haven, capable of protecting against inflation while allowing the construction of a solid and durable real estate asset. It also offers the possibility of generating regular rental income, accessible through the leverage of mortgage credit.
Real estate in 2024-2025: a market under pressure
The rise in interest rates: a major hindrance for borrowers
Since 2022, the sharp rise in interest rates has transformed the landscape of real estate investment. Where it was possible to borrow below 1% in 2021, mortgage rates now exceed 3% on average for 20 years. This rise has a double effect: it mechanically reduces households' borrowing capacity and increases the total cost of a real estate project. For a first-time investor, this often means revising their budget downward or accepting heavier monthly payments. If the trend stabilized at the end of 2024, banks remain demanding on profiles, limiting access to financing.
Economic uncertainties and their effects on demand
Beyond credit, the general economic situation weighs on household confidence. Inflation, slowing growth, and geopolitical tensions create an atmosphere of uncertainty. As a result: some investors hesitate, waiting for better visibility before jumping in. However, in areas with high rental demand, real estate remains supported by a structural shortage of housing. In other words, even if the volume of transactions has slowed down, the need for housing keeps a tension on certain markets.
Declining or stagnant real estate prices
The real estate market has slowed significantly: the volume of sales has dropped, and prices are starting to decline in many major cities. Where demand was once strong, it has weakened due to the combined effects of high rates and the loss of purchasing power among households. In some areas, prices are stagnating; in others, they are initiating a significant correction, offering buyers new negotiating margins. For patient and well-prepared investors, this situation can represent an opportunity to acquire at a better price in the logic of profitable rental investment.
Tighter regulations weighing on investors
Landlords must now deal with an increasingly strict regulatory framework: rent controls in certain cities, gradual prohibition of renting energy-inefficient properties (DPE F and G), and increasing obligations regarding energy renovation. These measures aim to improve the quality of the housing stock but represent an additional cost for investors. A poorly rated apartment in the DPE loses rental attractiveness and resale value unless significant renovation work is undertaken.
Practical advice: far from discouraging any project, these constraints can be turned into opportunities for investors who anticipate and position themselves on properties to be renovated, often negotiated at lower prices.
Why real estate remains a safe haven and a wealth lever
Building a Solid and Sustainable Wealth
Real estate investment has long been considered one of the safest investments for building wealth. Unlike financial assets, it is a tangible asset whose value stands the test of time. An apartment or a house does not disappear with fluctuations in the stock markets: on the contrary, it retains intrinsic value and can even be passed down from generation to generation. For an investor, buying real estate is laying a stone in the edifice of their future wealth and securing a part of their wealth in a concrete asset.
Generating Additional Income through Rental Investment
Beyond building wealth, real estate allows for the creation of a source of passive income from the rent received. This additional income can cover part or all of the mortgage monthly payments, or even generate a surplus each month.
For a first-time investor, it is often the first step toward gradual financial independence: your rental property works for you while enhancing your rental returns. The better your property is located and managed, the more it becomes a source of stable and regular income.
The Leverage of Real Estate Credit: A Powerful Asset for Investors
Few investments offer such an opportunity: to invest massively with a limited initial capital. This is the power of real estate credit leverage. Thanks to it, a relatively modest personal contribution allows for the acquisition of a property of much higher value, largely financed by the bank and indirectly by the rents from your tenants. This mechanism amplifies gains: as the capital is repaid, the net worth of the investor increases. In a scenario of rising prices, real estate investment takes on full value, as the capital gain is calculated on the entire property and not just on the initial contribution.
Protecting Against Inflation and Enhancing Capital
In a context of persistent inflation, real estate remains an excellent protection tool. Indeed, rents and property values tend to evolve over time, preserving the purchasing power of the invested wealth. Where savings placed in an account may lose real value, real estate maintains its ability to keep pace with, or even exceed, the rate of inflation.
In other words, investing in real estate is about turning inflation into an ally: your rents increase over time, while your loan payments remain fixed.
Decrypting the real estate market in 2025: the key indicators to watch
Loan Rates: An Opportunity to Seize in a Changing Cycle
After several years of increase, mortgage rates seem to be entering a phase of stabilization, and even a slight decrease according to some institutions. For investors, this development is crucial: a one percentage point reduction on a loan can represent several tens of thousands of euros in savings over the duration of the mortgage.
Example: on a loan of €200,000 over 20 years, a rate of 4% instead of 3% increases the monthly payments by nearly €100 and the total cost of the loan by more than €20,000. Therefore, closely following this curve is essential to identify the right timing for purchasing.
Real Estate Prices: Correction, Stabilization, or Recovery?
In 2024, many cities experienced a decrease in real estate prices, a direct consequence of rising rates. In 2025, the market appears to be entering a transition phase: some areas continue their correction, while others are already showing signs of stabilization.
For an investor, this situation opens up opportunities: buying in an area where prices are correcting allows for optimizing rental yields, while betting on a recovering city offers potential for capital gains in the medium term. The key is to target dynamic local markets, driven by employment, infrastructure, and demographics.
Rental Demand: Structural Engine and Local Dynamics
Regardless of the cycle, rental demand remains the true driving force behind real estate investment. In major student cities, attractive employment areas, or strained zones, demand far exceeds supply, ensuring a rapid and sustainable rental situation.
Practical advice: do not rely solely on national statistics. Study local markets (neighborhoods, growing mid-sized cities, well-served suburban areas) to identify where your rental income will be the most secure.
Taxation and Regulation: Constraints but Also Opportunities
Investors must deal with a complex and constantly evolving real estate taxation framework. Between rising property taxes, obligations related to energy performance (DPE), and tax schemes like LMNP in actual regime or Pinel, each project must be anticipated tax-wise.
But one should not view taxation solely as a constraint: if used well, it becomes a lever. An investment in furnished rental with the LMNP status, for example, allows one to amortize the property and significantly reduce its taxation.
Real Estate Market Seasonality: An Often Underrated Factor
The real estate market is also influenced by seasonality. Springtime and back-to-school periods are traditionally more dynamic, with more properties for sale and more candidates for rental. In contrast, winter months often mean easier negotiations, as pressed sellers are more inclined to grant discounts.
As an investor, taking advantage of an off-peak season can allow you to buy at a better price, while preparing for a rental launch when demand starts to rise again.
Your investor profile: the real criterion of the "right time"
Borrowing capacity and personal contribution: the foundation of financing
Before discussing the market or opportunities, the starting point remains your borrowing capacity. Banks assess your income, expenses, and your debt-to-income ratio to determine the amount they are willing to lend you. The healthier your financial situation, the more advantageous your credit conditions will be.
The personal contribution also plays a key role: it reassures the bank and reduces the borrowed capital, mechanically improving your rental yields. Even if some investors start with little contribution, having a financial cushion remains an asset to obtain the best rate and cover the notary fees.
Your goals and investment horizon: income or capital gain?
The “right time” mostly depends on your personal strategy. Do you wish to make a rental investment to generate regular income and supplement your resources, finance your retirement, or diversify your investments? In this case, long-term rental investment is the logical choice.
Conversely, if your goal is to resell quickly for a capital gain, you will favor properties offering a strong potential for real estate capital gains. The investment horizon then becomes crucial: the longer it is, the more you smooth out the market fluctuations and secure your rental profitability.
Risk tolerance and availability for rental management
Investing in real estate requires a dose of realism: are you ready to manage rental uncertainties, renovations, unpaid rents, or regulatory changes? Your risk tolerance and the time you can dedicate to rental management will directly guide your choice. A cautious investor will prefer a stable property in a tight area, with reliable tenants and moderate but regular profitability. A more audacious profile will be willing to target transforming markets, with higher profitability but also more uncertainties.
A clear and realistic real estate project: the key to success
Finally, beyond the numbers and context, the determining factor remains the clarity of your real estate project. What type of property are you looking for? Furnished or unfurnished rental? Which city, which neighborhood, what budget?
A well-defined project allows for effective comparison of opportunities, avoids mistakes, and aligns your choices with your wealth objectives. Without a clear vision, even the "best moment" in the market may be missed or poorly exploited.
Invest now or wait?
The question "Is it the right time to invest in real estate?" does not have a universal answer. What matters are the fundamentals and your personal situation. Real estate remains a safe haven asset: it builds tangible real estate wealth, generates regular rental income, protects against inflation, and relies on the power of real estate credit leverage.
In 2025, the market offers interesting signals: more attractive borrowing rates, real estate prices correcting in certain areas, and a strong rental demand that remains buoyant. All these elements create opportunities, provided you carefully analyze local dynamics and take into account the taxation.
But beyond the numbers, the “right time” is primarily the one that corresponds to your borrowing capacity, your personal contribution, and your goals.
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