Why is rental property increasingly rare?

Why is rental property increasingly rare?

Posted on Saturday 15 October 2022 at 07:00

Several agency networks interviewed by AFP believe that the number of rental properties has decreased over the past year, by 10 to 15%. The reason: the increasing difficulty of becoming a homeowner, forcing renters to stay in their homes longer, and the slowdown in new construction, which is also beginning to weigh on them.

Finding a property for rent today is an obstacle course.

Housing for rent is already a rarity, which worries real estate professionals. Point on this trend that is likely to continue in the coming years.

what’s going on ?

Several agency networks interviewed by AFP believe the number of rental properties has decreased over the past year. Foncia, who specializes in rental management, estimates this decline at 10%, the Nestenn agency network at 11%, the National Real Estate Association (Fnaim) at around 15%, and the Bien’ici advertising portal by 5% in the third quarter. “The big cities are very affected, but they are no longer the only ones”says Olivier Alonso, president of Nestenn.

And the demand is going up even more. This is how promoter Nexity noted, “Many additional contacts per ad. In the first quarter, we received a third more rental requests than last year,” General Manager Véronique Bédague told investors at the end of September. According to Bien’ici, the number of orders per ad increased by 80% in the third quarter, and even more in the Southeast.

Whose fault is it?

The drying up of the rental supply comes first… from the tenants themselves. They stay in their homes longer and longer.. “We had fewer tenants leaving, for one thing, which is that there is a wait-and-see attitude in the French track world series,” explains Jean-Marc Tourolion, president of Fnaim, to AFP.

because of : Increasing difficulty in becoming a homeowner, with the rapid rise in interest rates, and the rate of usury, after which lending is legally prohibited, excluding less wealthy borrowers. “The economic environment, instability, uncertainty, and wear and tear that does not rise as quickly as inflation, and thus banks refuse loans (…) all of this, indirectly, contributes to slowing down the rental market,” lists Lawrence Battle, President of Foncia ADB.

The slowdown in new construction is starting to weigh on us. This is a frequent complaint of developers: for several years, mayors have been more reluctant to authorize construction. If building permits are currently at record levels, it is a fictitious increase, after the influx of applications in December 2021, before stricter environmental regulations came into force.

It does not follow the number of construction sites started, with shortages of materials and high energy prices hampering the construction sector. “This offer is lower, it helps freeze the market,” Ms. Patel says. “We can’t buy where we want to go, but we need to live there, we need housing, and therefore, it turns into a rent request,” according to Ms Bédague.

Condition of thermal filters

Since August, owners of housing with energy marking F or G, which are the most energy-intensive, can no longer increase the rent. From next January 1, “improper” housing rentals will be banned due to their consumption. In 2025 it will follow Gs in mainland France, then Fs in 2028 and Es in 2034.

If the measure is supposed to encourage realtors to renovate their homes, professionals fear that some will pull them from the market. According to a survey of professionals commissioned by Fnaim, only 32% of owners of F and G residences currently choose to renovate it; and 26% to sell it.

The head of the company fears: “I think we have not measured the impact that this could have on the supply available in the private rental fleet.” “We haven’t seen that yet, nuance Lawrence Battle. But it’s a trend that will inevitably gain weight in the years to come.”

The last danger: converting apartments into short-term tourist rentals. According to a survey conducted by Fnaim, 6% of thermal refinery owners are considering this solution. “In many cities, seasonal rentals took precedence over traditional ones,” Olivier Alonso testifies, seeing professional clients move away from the traditional hotel industry in their favour.

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