Real estate: Economic crisis

On Wednesday, a major interview took place on France Inter with Charles Marinakis, the president of Century 21 France, and Ingrid Nappi, an economist in the real estate sector and professor at École de Pont Paris Tech, where they discussed the crisis in the French real estate sector.

Last week, former Prime Minister Édouard Philippe warned of a "social" and "urban" "social bomb" that he believes is represented by the housing shortage. Without calling it a "social bomb," real estate experts invited for an interview on France Inter mentioned a "tense" real estate market.

“The sharp rise in interest rates has significantly complicated the transfer and acquisition of real estate,” says Charles Marinakis, president of Century 21 France. “We are facing an unusual situation because negative factors that we haven’t seen in at least ten years are piling up,” he continues, mentioning the rise in interest rates, inflation, and consequently, the decrease in purchasing power.

The crisis affects not only households but also the entire real estate sector, emphasizes economist Ingrid Nappi, a professor at École de Pont Paris Tech. For developers, three factors are exacerbating the situation: "Financial expenses, because developers' costs are also rising; production costs, because materials are becoming scarce; and a shortage of land," the expert explains.

The crisis also affects real estate investors because "with rising interest rates, the value of their assets decreases." "This is also a crisis for notaries and everyone involved in real estate.

However, this sector is of immense importance to the French economy, accounting for up to 25% of GDP. Will the situation improve? "Time in the real estate sector moves slowly," reminds Charles Marinakis. "The situation will not be resolved until September of next year."