The French real estate market is a constantly evolving field, determined by a combination of economic, social and political factors. In recent years, the demand for housing in France has seen an increase. high increase, fueled by an increase in population and, therefore, demand and prices. This strong demand has led to a pressure on supply of housing, particularly in large cities and their suburbs.
At the moment, the morale of owners wishing to sell their real estate is not in good shape. In fact, they are forced to reduce the prices of their goods, because borrowing rates are still high (around 4%). This trend is likely to continue this year. However, the real estate market is also influenced by government policies and a law has just been changed, which could allow some owners to increase the price of their property.
A new rule comes into force and will increase the price of selling houses in France
In a few weeks, a new rule, which will delight owners of real estate, will come into force. The latter will allow owners of certain housing to increase the price of their property by more or less 15%. It will be a adjustment in the calculation of the DPE of a property (Energy Performance Diagnosis). The DPE is a document which evaluates the energy consumption of a building or accommodation. It has been mandatory in France since 2006 during real estate transactions.
The DPE therefore evaluates the energetic performance of a property by assigning a rating ranging from A to G, A being the best performance and G the worst. Recently, a new rule was put in place for calculating the DPE of each property. Indeed, a calculation bias was noted for certain accommodations, which were classified G or F by mistake, which could cause a loss of around 15% of the value of the property on sale.
The price of certain houses will increase thanks to a bias in calculating the DPE
The dwellings concerned by this method of calculation are the 40 m² accommodation maximum, having been classified F or G when calculating their DPE. With this new rule, these accommodations will be able to see their DPE go from F or G to E. The owners of these accommodations will therefore have to lower their rates by only 7%, compared to 15% previously. In addition, they will have the opportunity to leave their rental properties without doing any work insulationuntil 2034.
The adjustment of the DPE has a direct impact on the property valuation. In general, better energy performance translates into higher property values. This increase in home prices may also be fueled by other factors, such as increasing demand for housingthe scarcity of offers on the market and the potential drop in interest rates.
photo credit: Shutterstock Calculation of the DPE (Energy Performance Diagnosis) for real estate.
The consequences of the increase in prices of certain houses for owners and buyers
These changes in the calculation of the DPE and the increase in house prices have significant repercussions for current owners and potential buyers. For owners, better energy performance can therefore increase the value of their property and make their property more attractive on the market. However, this may also require additional investment in energy improvements to achieve a better ranking.
For buyers, this means they may need to adjust their budgets and their price expectations when purchasing an apartment of less than 40 m². They will also have to pay attention to the energy performance of the property they are considering purchasing, as this can have a impact on operating costs long-term.
