The property diagnostics market - France (2024)

1.2 Global market

Trends in the size of the global property diagnostics market World, ****, in $ billions Source: ****

The global real estate diagnostics market has grown significantly, from $**.** billion in **** to an observed size of $**.** billion in ****. Projections indicate continued expansion, with an expected size reaching $**.** billion in ****, $**.** billion in ****, and an estimated increase to $**.** billion in ****, finally reaching $**.** billion in ****. This development suggests a growing dynamism in the global real estate diagnostics sector over the next few years.

Despite the presence of multinational players, the global market remains relatively compartmentalized. depends on a large number of country-specific regulations, which no doubt explains the presence of several major French players in the world's top rankings.

1.3 Domestic market

According to the results of a Diagactu survey, real estate diagnostics firms have seen a median growth of around *% in ****, indicating an overall positive performance. Some **.*% of firms responding recorded an increase in sales compared to ****. Franchises appear to be performing particularly well, with almost **% reporting an increase in sales, reaching a median of +**%. On the other hand, solos have seen more moderate growth, with **% of practices reporting an increase (***) between **** and ****. Concerns are emerging about the slowdown in the real estate market and less favorable economic and political conditions.

2.1 How important is property diagnosis to consumers?

Poll: Which of these services offered by real estate experts are among the * most important? France, ****, in Source: ****

Real estate diagnostics, a key player in the real estate sector, is an essential ally for owners and buyers. By offering a reliable estimate of property prices, this service provides much-appreciated transparency, promoting a better understanding of the market. Checking the creditworthiness of buyers, rated at **% in the survey, testifies to the confidence participants place in this essential aspect of real estate diagnostics. In addition, carrying out visits and providing reports, rated at **%, underlines the active role played by real estate diagnostics in bringing transactions to fruition.

These results demonstrate that real estate diagnostics goes beyond mere regulatory compliance, emerging as a strategic partner in the real estate process. A reliable estimate of the property's price, with **% of importance, is the cornerstone, providing market players with a solid basis for making informed decisions. In this way, real estate diagnostics can be seen as an added value, making a significant contribution to the efficiency and success of real estate transactions.

2.2 A market driven by demand for energy-efficient renovation

The energy performance diagnosis business is one of the most important in the real estate diagnostics sector, with the *nd highest number of certifications among experts in the field, behind asbestos diagnosis (***). This activity is benefiting from a boost caused by the law of July *, ****, which makes the DPE enforceable and mandatory.

Distribution of homes according to their DPE (***) France, ****, in Source: ****

**% of French homes have a DPE rating of E or below. All homes with a rating below E will have to be withdrawn from the rental market by ****, making the need for an energy diagnosis even more pressing by then.

The government estimates that the total cost of eradicating "thermal flaws" will reach almost *** billion euros by ****. Consequently, if homeowners wish to continue renting out their properties, and if regulations don't change between now and then, DPEs would have to contribute an average of around ** billion euros a year to the energy renovation market to reach this target . At the same time, DPEs for F- or G-rated homes must be accompanied by an energy audit, which further boosts the business of property diagnostics companies.

Housing maintenance-renovation market France, ****-****, billions of euros Source: ****

The housing maintenance and renovation ...

2.3 A market fueled by the widespread risk of asbestos-related illnesses

The asbestos removal business is one of the most important in the real estate diagnostics sector, with the highest number of certifications among experts in the field (***). This business still seems to be doing well, with sustained demand, as shown in the graph below.

Asbestos removal market France, ****-****, in millions of euros Source: ****

The French asbestos removal market grew by *.*% a year between **** and ****, reaching €* billion. Growth is expected to slow to *.*% a year by ****, due to the economic slowdown in the construction sector, the main customer segment for asbestos removal.

All in all, the asbestos removal market has grown in recent years, and is now a mature market that should stabilize at around one billion euros in sales over the next decade. However, the market still retains a certain potential, as many buildings have not yet been asbestos-free.

Source: ****

TheAssurance Maladie - Risques professionnels report for **** offers an overview of asbestos-related occupational illnesses, highlighting significant financial and statistical implications.

Financial costs and breakdown: In ****, the costs attributed to asbestos-related occupational diseases reached *** million euros, representing **% of total expenditure for this type of disease. This sum breaks down into *** million euros for asbestos dust-related diseases and *** million euros for asbestos-related ...

2.4 Other hazards increasingly decisive for demand

The continuing high risk of termite contamination

Termite diagnosis is one of the * mandatory diagnoses to be included in the Dossier de Diagnostic Technique.

Source: ****

Termites are currently present in ** French départements. The worst-affected regions include the South-West, Atlantic and Mediterranean coastal departments, those bordering the Rhône, Garonne and Loire valleys, and Ile-de-France. It is important to note that this map is regularly updated to reflect the current situation[***].

An ever-increasing number of natural hazards are becoming the driving force behind the growth in ERP (***) diagnostics

ERP is also one of the * mandatory diagnoses to be included in the Dossier de Diagnostic Technique when selling a property.

Current and future mapping of natural hazards reveals a number of high-risk zones, which will become more pronounced by **** due to demographic trends and the development of activities. Population movements towards the Atlantic coast and south are set to continue, leading to an increase in risk in these regions[***].

Projections suggest an increase in the number of risks insured in these territories, while some regions experiencing a demographic decline are likely to see stable or declining risks. Industrial transformations, marked by a decline in employment in this sector and outsourcing to services, ...

2.5 Business threatened by falling sales of new and existing properties

At the start of ****, despite a positive ****, diagnosticians were expressing reservations about the prospect of a prolonged downturn in the real estate market. A survey designed to assess the impact of the real estate situation on their business revealed that **% of their sales depended on DDT sales and rental assignments. The real estate crisis, confirmed by a significant contraction in old housing transactions according to the Notaires de France, is having a direct impact on the diagnostician sector. Some **.*% of diagnosticians have noted a slowdown in new home sales, with **.*% describing it as severe. Similarly, **% have observed a drop in rental starts, although this phenomenon is judged to be less intense.

For **% of diagnosticians, this poor economic climate is reflected in a slowdown in business, with **% describing it as strong. Only *% reported an increase in business. The impact on sales is immediate, with **% reporting a drop since the start of the school year, **% of which is attributed to the poor property market. Smaller companies seem slightly more affected, with **% of solos reporting a drop in sales, compared to **% for companies with more than * people.

By comparison, at the start of the year, only **% of companies were reporting a fall in sales ...

2.6 Demand cyclicality

Evolution of interest in the "Diagnostic immobilier" search France, April **** - March **** Source: ****

A closer look at the cyclicality of Google search trends for the topic"Diagnostic immobilier" over the past few years highlights distinct seasonal fluctuations and search motives.

During the summer months, specifically July and August, there is a significant drop in searches, reaching its nadir in August. This period is marked by a noticeable reduction in real estate activity and diagnostic projects, due to the summer vacations, resulting in a consequent drop in online searches.

from September onwards, an upward trend emerges, signalling a resumption of post-summer real estate activity. Searches frequently peak inOctober and November, indicating renewed interest and commitment in the field of real estate diagnostics.

Another significant drop is observed in December, coinciding with the end-of-year vacations. Consumers tend to postpone their real estate projects during this festive period, leading to a decline in online searches.

The period from March **** to June **** appears to have been marked by a notable decrease in searches, potentially linked to the initial impact of the COVID-** pandemic on real estate activities. This specific period saw a significant reduction in online engagement in the real estate diagnostics field.

Overall, despite ...

3.1 Value chain

3.2 A steadily growing business base suffering from a labor shortage

Growth in the number of companies France, **** Source: ****

According to Ideal Conseils data from the Observatoire du Diagnostic Immobilier, *** new structures have emerged since the start of ****. Although these creations have seen a slight drop of *% compared to the same period in ****, the sector maintains significant activity, bringing the total number of companies to *,***. At the same time, since January *, ****, *** deregistrations have been recorded in the real estate diagnostics sector, marking a notable decrease of *% compared to ****. [***]

Workforce trends

The sector's actual workforce stands at **,*** real estate diagnostics professionals.

Thanks to the DPE reform, the property diagnostics sector is experiencing significant growth, recruiting massively to meet growing demand. Despite the fact that **,*** DPEs are carried out every week, an increase of **% is needed to cope with the sector's severe under-capacity, particularly to meet the targets for energy-efficient building renovation.

The main challenge is to double the workforce over the next five years, aiming to integrate **,*** new employees into the property diagnostics field. In addition to recruitment challenges, the retention of industry professionals is becoming crucial, not least due to high turnover. Despite the growing complexity and professionalization of the profession, real estate diagnostics remains relatively unknown and undervalued, creating structuring and ...

3.3 Focus on salaries and employment: a dynamic recruitment sector

With a view to stimulating business growth, **.*% of managers of companies specializing in real estate diagnostics express their intention to hire certified technicians over the next six months. This significant percentage underlines the persistent challenges facing the industry, which continues to face a labor shortage. This dynamic trend on the job market is further confirmed, with more than half of companies with existing employees expressing a willingness to hire, at **.*%. It is also noteworthy that even **% of independent diagnosticians are considering hiring. Franchises also stand out, with a high representation of **.*% among companies intending to hire, whereas their share of the panel as a whole is slightly lower, at less than **%[***].

Poll: Over the next * months, what level of qualification are you looking for in new recruits? France, ****, in Source: ****

An exploration of business leaders' preferences regarding the profiles of candidates sought reveals some marked trends. A significant percentage, **%, intend to recruit an experienced certified technician, while **. *% are inclined to consider a beginner certified technician. However, **% of company managers are considering recruiting a person to be trained and certified. This approach appears to be both a proactive recruitment strategy and a choice motivated by the challenges of the job market. These ...

3.4 Measurement-diagnosis equipment suppliers omnipresent in real estate diagnostics

Real estate diagnosticians rely heavily on suppliers to provide them with the tools, equipment and materials they need to carry out accurate diagnoses that comply with regulatory standards.

The equipment used by diagnosticians, such as measuring devices for energy diagnostics, instruments for electrical and gas diagnostics, and devices for acoustic diagnostics, are supplied by specialized partners. These suppliers play a crucial role in the quality of the diagnostics produced.

Property diagnosticians also need reliable sources of information, particularly for risk-related diagnostics (***).

In addition, diagnosticians may work in collaboration with experts in specific fields, such as structural engineers, sanitation specialists or surveyors. These collaborations require solid relationships with specialized service providers.

In a constantly evolving sector where accuracy and regulatory compliance are paramount, the choice of suppliers becomes strategic for real estate diagnosticians.

Source: ****

3.5 Laboratories: trusted partners in a competitive market

Poll: Which laboratory(***) do you use for your real estate diagnostics? France, ****, as % of total Source: ****

According to ananalysis of the survey results, the undisputed market leaders in the analysis of Asbestos Materials and Construction Products (***), followed by Lepbi, SGS and Flashlab, all around *%.

The data also show that **% of respondents use several laboratories, and *. *% sometimes choose foreign laboratories because of their advantageous rates, as revealed by this impartial market survey.

Rates and trends: According to ** respondents, the average cost of analyzing samples of Asbestos-Free Building Materials and Products (***), including shipping costs, is €**.** excluding VAT. Price stability over the last three years was underlined by **% of participants, with **% reporting a decrease and **% an increase. With regard to invoicing, **% of respondents noted no variation according to the number of diapers analyzed, while **% reported additional pricing from the second diaper onwards.

Return times : The majority of analyses (***).

Laboratory flexibility and proactivity: A high degree of flexibility is observed, with **% of respondents indicating that their laboratory is flexible enough to reduce lead times if necessary. What's more, **% of respondents report that their laboratory starts analyses before they receive the accompanying sample sheet.

Potential problems and laboratory responsiveness: In the event of missing or erroneous ...

3.6 Certification/training bodies

Since April *, ****, and in accordance with the provisions of the Decree of December **, **** establishing the certification criteria for technical diagnostic operators and training organizations, as well as the procedure for the accreditation of certification organizations, training organizations must obtain certification to provide training for diagnosticians in all or part of their fields of expertise (***).

This certification, valid for * years, is awarded by a Cofrac-accredited certification body. Depending on the choice of training organization, it covers both initial and continuing training.

Two certification bodies, I.Cert and Global Certification, have been accredited by Cofrac and are active in this market segment.

Certification market breakdown (***) France, ****, as % of total Source: ****

As of January **, ****, ** organizations had acquired the required certification. Two new entrants are CFDI and K par K Formation (***). However, CNFP and Quali-Forma are no longer certified for real estate diagnostics training.

Source: ****

4.1 Offer typology

The French real estate diagnostics market encompasses many different disciplines, practiced or not by the **,*** technicians who often hold several different certifications among those described below.

Distribution of professions among real estate diagnostics experts France, ****, as % of total Source: ****

Asbestos diagnosis

Carried out by a certified professional, this diagnosis aims to detect the presence of asbestos in building materials. The results are included in the Technical Diagnostic File (***) provided to the parties concerned.

DPE/Energy audit

Carried out by a certified diagnostician, the DPE assesses the home's energy performance by assigning energy consumption and greenhouse gas emission labels. The results are included in the Technical Diagnostic File (***) to inform potential buyers or tenants.

CREP/DRIPP

Diagnosis of the risk of lead poisoning in paint, also known as "lead diagnosis", is a mandatory assessment in France for homes built before January ****. Carried out by a certified professional, the diagnosis aims to detect the presence of lead in paint coatings. The results, included in the technical diagnosis file (***), provide essential information for the safety of occupants, especially young children who may be exposed to lead.

Electricity diagnosis

Electricity diagnosis in France is a mandatory assessment for the sale of a home whose electrical ...

4.2 Service pricing

Rates for apartment diagnostics

Source: ****

Rates for home diagnosis

Source: ****

Source: ****

4.3 Rising oil prices weigh on the real estate diagnostics market

Average price per quarter for diesel and unleaded ** in France France, ****Q*-****Q*, € Source: ****

The trend in average diesel prices in France, from ****Q* to ****Q*, has a direct impact on the property diagnostics market in several ways.

Firstly, diagnosticians use diesel-powered vehicles to carry out their diagnostic missions. The increase in diesel prices, from €*.** in ****Q* to €*.** in ****Q*, means higher operating costs for diagnosticians. This impact on the price of services could be passed on to customers. Secondly, property diagnostics and energy audits are becoming crucial. Buyers and tenants are likely to be looking for information on a property's energy performance in a future where the trend towards energy prices may influence the value of energy-inefficient properties, and clean energy standards are a must. These elements are thus becoming determining factors in real estate decision-making, reinforcing the importance of real estate diagnostics professionals in an ever-changing market[***].

4.4 Digital as an ever-increasing opportunity

Operators often need to invest in hardware, including one or more real estate diagnostics software programs. Although the use of software is not compulsory, it offers several advantages for real estate diagnostics operators, including:

Time-saving Compliance with current regulations Customization of reports

Breakdown of the diagnostics software market in France France, ****, in Source: ****

Liciel is the undisputed leader in the diagnostic software market, with well over **% market share. In contrast, Analysimmo occupies second place with just **%, closely followed by Windiagnsotics at *%. An intriguing observation is that six companies share **% of the market, while Liciel accounts for over half of all diagnosticians in France. Caution is advised, however, as these figures, although derived from an objective study conducted by ernmt-officiel.com, remain an estimated representation of reality.

The application of BIM to real estate diagnostics

In its original language, BIM stands for Building Information Modeling for most people, and Building Information Management for some. The most common literal translation is Modélisation des Informations du Bâtiment, or Building Information Modeling. In the final analysis, it's all about digitally modeling all the information relating to a building, in order to centralize it and manage it throughout the life of the structure, from ...

5.1 Operator regulations

To be able to operate, an operator must meet a number of requirements, particularly in terms of:

Training (***) Certification (***) Documentary surveillance (***) Certificate of professional liability insurance (***) to meet legal obligations Independence and impartiality Adequate material resources

If the diagnostician fails to comply with regulations when carrying out the diagnosis (***), the buyer has the right to take legal action to claim damages and financial compensation for the loss suffered.

Diagnosticians are also liable to financial penalties, with a fine of €*,*** for uncertified practice, rising to €*,*** in the event of a repeat offence.

Certification and training

The certification process ensures the competence of diagnosticians and their continuous updating. To obtain certification, the diagnostician must pass a theoretical and practical examination, valid for * years. Regular monitoring is carried out by the certification body to ensure that skills are maintained throughout this period. at the end of the *-year period, re-certification is required to enable the diagnostician to continue in business.

The certification criteria, defined by thedecree of December **, ****, cover the fields of electricity, gas, asbestos, lead and termites. However, this decree will be cancelled in September ****. Specifically, thedecree of July **, **** governs DPE certification for diagnosticians carrying out energy performance diagnostics.

5.2 Legislation for the 9 mandatory diagnostics

Below are the standard criteria for the technical inspection of your property.

Asbestos diagnosis

An asbestos report is required to certify the presence or absence of asbestos in a dwelling built before July ****. Mandatory when selling a property, this diagnosis must be included in the technical diagnosis file given to the buyer. If the diagnosis was carried out before April ****, a renewal is required before the sale; however, from April **** onwards, its validity is unlimited. Recommendations and measures may be issued according to the diagnostician's report, including periodic assessment, risk analysis and corrective action[***].

Energy audit

Since April *, ****, energy-hungry homes have been required to undergo an energy audit when they are sold, under French law no. ****-**** of August **, **** against climate disruption. This measure, aimed at single-family homes and buildings belonging to a single owner, offers a detailed statement of energy and environmental performance. Mandatory for homes rated F or G since April ****, the obligation will be extended to class E homes in **** and class D homes in ****. The audit, which is valid for five years, provides additional information to the DPE, including an estimate of performance before work, a heat loss diagram, and renovation proposals[***].

DRIPP/CREP

CREP (***), given to ...

5.3 Focus on ECD

Definition

Created in ****, the Diagnostic de Performance Energétique (***). It informs buyers and tenants of the "green value", recommends improvements and estimates energy costs. Since ****, the DPE has been reformed in ****, and again on July *, ****, moving from simple information to enforceable status. This overhaul, focused on "housing" DPEs, is part of the drive to accelerate energy renovation, playing a key role in informing buyers, providing financial support and meeting regulatory obligations.

The new DPE in ****

Initiated over two years ago, the transformation of the Diagnostic de Performance Energétique (***) took effect on July *, ****. Following the publication of two major decrees in December **** and the announcement by the Ministry of Housing in February, several notable changes have taken place:

A mandatory DPE

The DPE is a mandatory requirement for property transactions in mainland France, barring certain exceptions (***), grouping together all the findings relating to the sale or rental. The DPE is then given to the buyer or tenant, providing crucial information for assessing the property's budget, including theoretical annual energy costs expressed in euros.

Construction sites

New builds are not exempt from this requirement. The DPE remains mandatory when purchasing a property under construction, also known as "DPE neuf" or "DPE construction". ...

6.1 Positioning the players