France: Property prices are falling…

The estates, once considered France’s safe haven, are now reeling under the weight of powerful economic and political forces. While sellers face the reality that prices are falling, real estate agents are seeing their futures darken at an alarming rate. This once prosperous market, which has experienced uninterrupted growth for years, is now going through an unprecedented crisis.

A decline is inevitable but necessary according to Orpi

The French real estate market is going through a period of change that seems inevitable in the eyes of Guillaume Marinaud, president of the Orpi network. Speaking to BFM Business, he said commodity prices must continue to fall to allow sales to resume. This view is based on a market reality characterized by limited supply and limited demand, exacerbated by the prevailing economic uncertainty. For Marinaud, the price correction, although it has reached 7%, is still not enough to revive the sluggish market. “Prices will continue to fall, but a little because we still have supply tension,” he said, stressing that this process is important to open sales and restore the market.

Despite the recent rate cut initiated by the European Central Bank, the real estate market is struggling to regain its momentum. Sellers, often reluctant to lower their prices, contribute to a kind of inertia that hinders recovery. According to Marinaud, this drop in prices is not only due to economic conditions but is a sine qua non condition for transactions to resume at a normal pace. Despite these problems, he remains optimistic about the market’s ability to stabilize, but only if sellers accept to lower their expectations, a change that Orpi is trying hard to encourage with its customers. .

A wave of bankruptcy hits real estate agencies

While prices are falling, the devastating effects of this crisis are not limited to market corrections. The real estate industry is in a real earthquake with an unprecedented wave of bankruptcy among professionals. According to the National Federation of Real Estate Agents (FNAIM), more than 1,120 agencies have closed their doors in the past twelve months, a number that represents a staggering 112% increase compared to the previous year. This event, which also affects independent business agents, shows a deteriorating market, where the decline in transactions and banks’ reluctance to give credit has pushed many players out. These foreclosures are reminiscent of the dark hours of the 2008 subprime crisis but on a more alarming scale.

In the face of this bloodshed, the chances of recovery seem limited. The crisis appears to be ongoing, fueled by multiple and interconnected factors. Real estate agents, once drivers of a thriving market, now find themselves navigating troubled waters, and some are even choosing to change careers. The cascading bankruptcies translate into an inescapable reality: the real estate sector, once a bastion of stability, is now on its knees.

The French real estate market is in flux, caught in a storm of deflation and a series of recessions. This crisis, rather than just being in parentheses, could well define the state of the sector in the years to come. If signs of recovery do appear, they always depend on the general acceptance of the need to fix prices and stabilize the economy and politics. The coming months will be crucial for the future of real estate in France, as the sector struggles to emerge despite unprecedented challenges.

ATTENTION

The views, opinions and opinions expressed in this article are solely those of the author, and should not be construed as investment advice. Do your research before making any investment decisions.