New anti-thermal-flat measures are causing havoc in the property market in France

Between 2020 and 2022, the number of homes labeled “F” or “G” for sale on the SeLoger website nearly doubled and are advertised at a discount.
The number of “energy poor” rental listings has decreased by 40% in the last year.

A new search criterion for houses for rent or sale has recently arrived on the SeLoger website, which continuously displays 1 million property advertisements: the energy performance diagnosis (DPE).
Between the boxes that allow visitors to select offers with a lift and advertising with merely photographs, customers may now select homes rated from “A” (very efficient) to “F” or “G.” (excessive energy consumption).

No one worried about the DPE five years ago, but today it is as significant as a balcony or a parking space “explains Thomas Lefebvre, scientific director of SeLoger and MeilleursAgents, a real estate data aggregator.
The Climate and Resilience Act has altered French behavior.

The law prohibits renting the worst thermal apartments (designated as “G+”) beginning January 1, 2023, a prohibition that will be extended to all properties categorized as “G” in 2025, “F” in 2028, and “E” in 2034.
The goal of this initiative is to incentivize landlords to renovate in order to reduce greenhouse gas emissions, despite the fact that the building sector accounts for over a quarter of national emissions each year.

brown concrete old building needed refurbish for thermal optimization

More stringent diagnostics are required

According to SeLoger, which aggregates the listings of 30,000 real estate professionals, these coercive measures have already resulted in a large increase in the number of thermal units placed up for sale beginning in 2021.
According to a survey released on Wednesday, 1 February, “F” and “G” residences will account for 19% of all properties offered for sale on the real estate website in the fourth quarter of 2022, up from 11% two years earlier.

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While this increase can also be explained by a stricter obligation to display the DPE on advertisements and by a tightening up of diagnostics, according to Thomas Lefebvre, it is above all due to the behaviour of owners “who anticipate the loss of value of their property and do not want to carry out work, all in the context of an energy crisis”.
This sales trend adds to the tension on the rental market: in France, the volume of rental advertisements for “flats” has declined by 40% in the previous year, while in Paris, the number of thermal flats for rent has fallen by 60% on the platform.

Surprisingly, sales projects associated with a negative DPE “do not only concern landowners targeted by the law,” SeLoger emphasizes.
According to an OpinionWay survey commissioned by the site, 31% of sellers of primary houses chose to sell due to a low DPE – a reason highlighted by half of sellers of second properties.

The Paris market, in particular, is a source of anxiety.
While prices have begun to fall and property professionals are reporting an overstock of suitable properties for sale, the real estate website offers four times as many adverts for the sale of thermal flats in Paris in July 2021 as in July 2021.
So much so that the “F” and “G” designations currently account for 37% of the capital’s available property stock.
In some rural departments, such as Creuse, “35% of the adverts for properties for sale concern energy flats, most commonly houses built before the 1970s,” Mr Lefebvre observes.

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Offering price

A high energy label, on the other hand, signifies a significant reduction in the price of a property.
According to SeLoger, the average selling price of a low-energy property is now 4% lower than that of a comparable house with a higher rating (the discount goes from -1% in Paris to -5.6% in rural areas).
Another disadvantage is that thermal flat purchases are more common and more difficult to negotiate (with a negotiation margin of – 5.6% on average in France).

This means that a house worth 300,000 euros can be sold for 270,000 euros after the discount and negotiation “Thomas Lefebvre summarizes.
As a result, the question of financial interest in carrying out labor, taking into account public funding, will arise.
According to the MeilleursAgents property price indices, energy flat prices have climbed by an average of 3.7% since July 2021, which is twice as little as other properties.
They have even plummeted by nearly 4% in Paris.

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