Paris real estate rental market

Since mid-2023, the Parisian rental market has been marked by significant strain on both the demand and supply fronts. Rising interest rates have prompted potential homebuyers, facing affordability challenges, to turn towards the rental sector. Meanwhile, increased obligations on owners, ranging from rent controls to energy renovation requirements and a surge in property taxes in Paris, have deterred some property owners leading to a partial drying up of available properties. The most acute tension is observed in the unfurnished rental market for primary residences. In contrast, the furnished rental market experiences less strain, and this tension diminishes with larger property sizes.

In a nutshell, the unfurnished rental market is facing a shortage, while the furnished rental market is experiencing an oversupply. This oversupply leads to an implicit selection process for properties based on factors such as location, overall condition, furnishings, and rent. We can share some insights based on our accumulated experience (gained from around 250 rentals per year)

From a supply prospective:

• The long-term rental scene now sees a surplus of furnished rentals compared to unfurnished apartments. This shift is attributed to the flexibility offered by furnished leases, granting landlords an annual ‘window’ to reclaim their property, coupled with the tax breaks associated with furnished rentals (see the taxation section for details).
• 1BR and 2BR furnished properties in Paris’s central and western districts still offer favorable rental conditions, provided the properties are well-maintained with contemporary furnishing.
• Beyond the 100-120sqm threshold, the demand noticeably tilts in favor of unfurnished rentals.
• Rent spreads between furnished and unfurnished properties with similar attributes have narrowed due to the abundance of furnished properties on the market

In terms of tenant expectations:

• The level of expectation from both individual and corporate tenants has risen. Whether for unfurnished or furnished rentals, the selectivity of the market compels landlords to offer well-maintained apartments.

• Special attention should be given to kitchens and bathrooms, as their condition can sometimes differ from the rest of the apartment.
• For unfurnished rentals, candidates increasingly expect a fully equipped kitchen. It’s a must-have especially when it comes to renting to an expatriate tenant.
• It is crucial to provide high-quality furnishings for your property to reach its full potential (second-hand furniture is to be avoided). This doesn’t necessarily mean luxurious furnishings, but it should be in perfect condition with contemporary furnishings
• Prospective tenants are now placing a keen eye on Energy Performance Certificate (DPE) ratings, including double-glazing.