How to revitalize real estate in France

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They were forced to wait, but their wish came true. In early February, just weeks after the appointment of Gabriel Attal in Matignon, the Prime Minister announced the appointment of a new Minister of Housing. Guillaume Kasbarian, 36, succeeded in the National Assembly by backing a bill aimed at protecting housing from "illegal occupancy," that is, unauthorized entry. True, this has upset left-wing forces, but it may have reassured real estate representatives and investors who prefer other types of investments.

But the young minister won't have too much time to revisit the past. He inherits a region in full economic crisis. While many potential buyers had hoped for lower prices, especially in Paris, over the past few months, the drop in prices has also been accompanied by a drop in the number of transactions. There were "only" 875,000 in 2023, a far cry from the million that real estate agencies and professionals were used to. The 21.5% drop, according to FNAIM, is the biggest in volume over the last 50 years.

Decrease in purchasing power

The reasons are well known: rising interest rates, with inflation accelerating at the same time, reduced the purchasing power of the French. And because sellers were unwilling to lower prices, the market tanked. At the same time, energy renovation requirements also changed the rental market.

Thus, the real estate sector is in crisis. Many real estate agents have changed their profession, other agencies have ceased to exist. However, the most affected by this economic downturn have been construction companies (developers, builders of residential houses).

La Story is a podcast by Les Echos, presented by Pierrick Fay. The episode was recorded in March 2024. The editor-in-chief is Clémence Lemestre. Guests are Anne-Sophie Vion (journalist in the heritage section of Les Echos) and Olivier Descamps (CEO of IAD France). Directed by Willy Gunn. In charge of production and editing is Michel Varnet. Music - Theo Boulanger. Graphic design - Upian. Photo - Shutterstock. Sound effects - A fragment of "The King is Dying", a fragment from the 1966 movie "The Big Restaurant", BFM Business, a fragment of "Mysteries of Paris" 1962, Europe 1, a fragment of "Don't Ever Forget".

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