French real estate market: investors are slowing down

The real estate market in France is in a slump. Not only individuals but also institutional investors are seeing a 24% drop in investments in 2022, according to a recent study by consultancy Knight Frank. Investors are becoming less interested in buying homes in bulk and more interested in managed real estate.

The managed real estate market is now facing a serious slowdown in France.

According to a report by consultancy Knight Frank, institutional investors have reduced investment in buying homes in bulk by 24%, amounting to €5.4 billion last year compared to 2021. This trend is mainly due to the sharp rise in interest rates, which has been uneven across all regions. Unsurprisingly, Ile-de-France is attracting the main attention of investors, with three quarters of investment volumes in 2022 in residential real estate. However, investors are increasingly interested in another niche segment - the managed real estate segment, i.e. properties for a variety of purposes (vacations, seniors, students, etc.). etc.).

Managed real estate: a reassuring model for investors

With its own tax and more reliable system, this real estate segment is increasingly attracting institutional investors.

What is the trend for 2023?

The managed residential real estate segment in France should continue to grow in 2023, according to Knight Frank. As supply and demand increases, nursing homes will continue to attract more investment. But this interest will be seen in the overall context of declining investment in the residential real estate market. In fact, the impact of rising interest rates will cause institutional investors to be more cautious this year and bet on the safest assets in anticipation of an improvement in this segment.