"Alain Atalla (Trinity Gestión Privada): Soon more opportunities on the market."

"Alain Atalla (Trinity Private Management): 'I think we will face a major housing crisis in the coming months.'"

In the context of a challenging economic situation, the real estate sector is inevitably suffering. Rising rates, costs, and a decrease in lending capacity and purchasing power... However, the measures taken by the government do not inspire unanimous support. The market is analyzed by Alain Attal, founder of Trinity Gestion Privée.

Decision-makers.

How would you assess the current state of the real estate market?

Alen Atalla. The real estate market in France is in a difficult position. I believe we will face a significant housing crisis in the coming months and years, and this is due to several reasons. Firstly, the decrease in building permits is an indicator in the financial sector. The number of building permits has been declining since 2018. One reason for this is the difficulties municipalities face in issuing new permits due to rising local taxes. The community consists of schools, roads, amenities, taxes... and dissatisfied voters. "Financial consultants are opening up investment opportunities in real estate where the government is closing them."

Another reason is the government's biodiversity plan and its goal of achieving Zero Artificial Development, which I believe is not a bad thing. This law also puts an end to the behind-the-scenes deals of recent years that have excessively increased the consumption of natural land resources. Finally, the rise in prices related to energy standards for new construction and the obligation to renovate thermal deficiencies, along with the current financing conditions, herald a rather pessimistic scenario. Recently, the Prime Minister made a statement about the housing crisis... The current government's unwillingness to support real estate is becoming a problem. In June of last year, Élisabeth Borne announced that there would be no extension of tax measures, which harms professionals, as it affects 350,000 jobs directly or indirectly related to this decision. Yes, it had its cost for the state, but it still brought in 91 billion euros in tax revenue! The cessation of these measures will certainly lead to a reduction in the number of developers, and France will face an even greater housing shortage. Without funding, France's aging real estate stock will not be able to renew itself, which is a problem, especially in the case of thermal deficiencies; and new housing will not be created in stressed areas. The Prime Minister directed her speech towards the possible opening of certain abandoned zones (B2 and C1), but without any compensations.

Has the ability of the French to invest been affected?

The High Financial Council (HCSF) has set a debt limit of 35%, regardless of the family's tax income and the remaining amount for living, which can be significant depending on the situation. In my opinion, there is important work to be done for real estate investors seeking rental opportunities. Banks are also raising their rates, making it more difficult to access credit after a certain age. Additionally, inflation has significantly impacted the cost of materials and the purchasing power of families, not to mention the supply disruptions related to the war in Ukraine.

Have your clients experienced a decline in real estate in their portfolios?

Since 2022, we have received many inquiries from clients who wanted to invest in real estate but were unable to access credit for a variety of reasons. Additionally, the value of this asset has increased due to the decline in interest rates in recent years and the "coronavirus revolution." Today, there is no indication that real estate will gain strength in our portfolios.

Will new investment strategies emerge?

We will try to create club deals where we can promote real estate investments, which will allow us to facilitate access to loans for our clients with much lower contributions than required by banks. In this way, financial consultants will open up investment opportunities in real estate where the government closes them. Digitalization in the transaction sector is already taking an important place in the market. Digitalization and interaction will undoubtedly become a winning strategy.

How do the transition to energy efficiency and the corresponding regulations affect access to this asset?

We make a real distinction between residential property and investment property. When it comes to real estate investments, there will always be opportunities that offer returns and security, provided that the tax policy allows for it and everything is thoroughly researched. "It would be easier to encourage the creation of new housing than to renovate the old."

However, many properties classified as thermal sinks will enter the market, and in the future, they will be labeled as "uninhabitable" at prices completely detached from the market, with discounts. This is the result of the inaction of successive governments. Today, the transition imposed by Macron's government is too rapid. Construction professionals are not trained in the latest building standards and materials, and owners, whether they are landlords or not, are concerned about the high costs of renovation for the reasons mentioned above.

Are the efforts made to promote sustainable and eco-friendly housing in France sufficient?

It would be easier to encourage the creation of new housing than to renovate the old. The environmental crisis is serious and requires immediate action. The government should have imposed more restrictions on companies and citizens to accelerate the energy transformation of our living spaces decades ago. Without private investors and financial compensation, in this case, tax incentives, it seems difficult to imagine a sufficient amount of housing and a successful ecological transformation.

Have any measures been taken in favor of the owners?

Recently, the National Assembly passed a law protecting property owners from encroachment, which is a good thing. Besides that, I don't see anything else. In our country, property owners often remain sidelined in favor of the principle of equality.

What proposal would you make to overcome this crisis?

It would be interesting to quickly introduce a new program similar to the Pinel program, starting in 2024, with a longer investment term. The introduction of such a program would replenish the state treasury, save jobs in the industry, and ensure the ecological transformation of housing, while not forgetting the main goal - to provide housing for the French people. The ball is in the government's court. The interview was conducted by Marine Fleury.