Real estate agencies are closing in France due to a decrease in sales volume.

Last year witnessed the lowest real estate sales figures in the past 50 years, and experts note that 2024 may not be much better. According to Fnaim, real estate sales have decreased significantly over the last 50 years, and the outlook for real estate agencies in 2024 does not suggest any significant improvement.

According to a new report by the risk consulting agency Altarès, nearly 900 real estate agencies in France closed their doors last year due to a decline in property sales. This includes both independent agencies and branches of major networks.

Not only did the number of closures increase by 116% compared to 2022, but this is also the highest figure since the housing market crash in 2009.

Decline in real estate sales

The rise in interest rates and the cost of living crisis have led to a challenging situation in the market over the past few months, and the number of real estate sales has significantly decreased. According to a report by Fnaim (the National Federation of Real Estate Agents in France), 875,000 old homes were sold in 2023, which is nearly 22% less than in 2022, marking the most significant decline in the last fifty years.

Average mortgage interest rates are still over 4% for a 20-year loan term, said Stéphane Fritz, president of the national real estateagency Guy Hoquet Immobilier, to FranceInfo.

“The French public has lost 15% of its purchasing power over the past two years,” the Fnaim report added, noting that this situation has severely impacted potential first-time buyers.

However, Mr. Fritz is trying to downplay the significance of the problem by stating that the number of closed branches accounts for only 3% of the total number of agencies across the country.

More closures in 2024?

Nevertheless, Olivier Prensival, president of Fnaim Grand Paris, said that there could be even more closures this year (2024).

“We believe that this figure will nearly double in 2024,” he said. “We will lose jobs, there will be many layoffs, and as a result, stores will remain empty.”

He called on government authorities to take measures to revive the market, but he is skeptical about future changes in the coming months.