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3,000 real estate agencies in France are on the brink of closing down.

3,000 real estate agencies in France are on the brink of closing down.

3,000 real estate agencies in France are on the brink of closing down.

Up to 20,000 jobs could be lost as 3,000 real estate agencies are closing due to the pandemic, warns the Fnaim real estate federation. After a record year in 2019, when over a million residential property sales were registered in France, many agencies are in "mortal danger," said Fnaim president Jean-Marc Torrollion. "Our members have at least 400 million euros in commissions waiting to be transferred, but they are being held up by final documents," he said. "The survival of entire sectors of real estate is at risk. In the coming months, nearly 3,000 agencies could close, and 20,000 jobs could be at stake if the network is not quickly restored. They are certainly not the only ones affected by the crisis, but considering the importance of real estate in the lives of the French, the economic and psychological consequences will be incalculable if the sector is lost."

The reopening of the French registry at the beginning of April and the decree from April 3 allowing notaries to work remotely have started to ease the backlog and finalize transactions. Mortgage broker Capfi stated that applications for new financing have decreased by 60% due to the lack of viewings, and verbal agreements are still waiting for documents, such as sales contracts, to be completed and signed. Philippe Tabore from Capfi said, "Nevertheless, we are still receiving financing applications. The market has significantly slowed down, but it hasn't stopped. We and others are working to maintain a dynamic market as much as possible for a quick restart. The Bank of France or the [government financial authority] HCSF also play a role in creating a good environment for borrowers."

Technologies have helped some agencies remain active. Beaux Villages Immobilier in New Aquitaine stays in touch with its home and British buyers to recover when the future after the lifting of the lockdown becomes clear. Marketing Director Julia Saville said, "There is a limit to what we can do from home, but some of our new measures will have a permanent place as new working practices. We are conducting three- or four-way video viewings with the buyer, seller, and our agents all together online." Deals are nearing completion, although more slowly due to the restrictions under which notaries operate.

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"But website traffic has remained strong. The desire to move to France remains high, but it must be aligned with the ability to relocate. Whatever happens in the coming weeks or months, the domestic market is likely to recover quickly and strongly. Last year was a record year for sales, and after returning to life post-lockdown, we will likely see city dwellers wanting to move to rural areas with space, gardens, and privacy." French notaries also noted this in their quarterly real estate market forecast on April 20. They sounded more optimistic, highlighting short-term, medium-term, and long-term visions. The short-term period will be a phase of catching up on business interrupted by the lockdown, but the market needs a coordinated start. The medium-term forecast shows "brutal consequences" for months with an extended vacuum and, during typically active times, a decline in business. The long-term period is difficult to predict without knowing the economic consequences of the virus. If the economy slows down, the market may not recover until the end of the year or early 2021, but without the dynamism of 2019. French notaries say the country is in a healthier position than after the financial crisis of 2008-2009. "Household purchasing power and financing conditions are better than in 2009. However, there is fear that banks may tighten conditions and reassess weak cases, especially for first-time buyers. "Demand is still driven by very attractive interest rates, and real estate remains a reliable haven." The forecast, like for all sectors, depends on the success of the government's deconfinement plan and avoiding a second wave of the virus. If it succeeds, French notaries believe the market will "recover." However, if the pandemic returns, the real estate market "will be subjected to serious scrutiny," but "there is no difficulty we cannot overcome."

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