The real estate agency market - France (2023)

1.2 A growing French real estate agency market

The real estate market in France is highly dependent on various economic crises, as was the case during the financial crisis in ****, and more recently during the health crisis, as well as the geopolitical crisis with the war in Ukraine. In ****, however, a strong rebound benefited the sector, with the French real estate market recording its absolute record for transactions, reaching almost *.* million[***].

Real estate agencies are registered under the APE / NAF code: ****Z - Agences immobilières. According to Insee, the estate agency market will account for total sales of over ** billion euros in ****, **. *% more than in **** before the health crisis.[***] What's more, the sector has seen its sales increase continuously since ****, with the exception of **** with covid-**. The average annual growth rate between **** and **** is *.**% .

Size of the French estate agency market France, ****-****, billions of euros Source: ****

1.3 Looking back at the impact of the Covid-19 crisis

Despite the strong impact of the Covid-** crisis on the estate agency sector, the crisis and the confinements of **** did not mark a complete halt to real estate activity. In fact, after the first shutdown, almost **% of French people continued to consult real estate ads, and over **% continued to request information from estate agencies. Do you think you will continue to consult real estate ads? France, April ****, in Source: ****

Will you continue to request information from estate agents? France, April ****, in % Source: ****

Nevertheless, this apparent dynamism in searches cannot mask a decline in purchasing plans: nearly **% of French people were thinking of postponing their real estate purchase, so nearly **% are definitely postponing. Are you planning to postpone your property purchase? France, April ****, in Source: Le Figaro Immobilier, survey conducted during *st confinement **** The number of promises to sell signed fell by only **% in November, compared with -**% eight months earlier, according to a study by Meilleurs Agents. [***]

2.1 Buoyant market for existing and rental properties, while new-build and commercial property suffer from crises

Existing homes The property market is particularly buoyant in the existing homes segment. Households increasingly prefer to buy an existing property and renovate it, rather than build a new one. Between **** and ****, the number of transactions in existing properties rose steadily, then fell by *.*% in **** to reach *.** million transactions in ****. We can see that in ****, at the height of the pandemic, sales volume was slightly down on the previous year.

Number of sales of existing homes France, ****-****, in thousands Source: ****

New housing

In terms of new housing sales, we can see a significant drop in the number of sales orders and reservations since the beginning of ****, coinciding with the arrival of the pandemic.

from the first quarter of **** through to the second quarter of ****, housing marketing (***) continued to decline significantly, reaching levels lower than those recorded during the COVID crisis.

Between the first quarter (***) of ****, we observed a significant **.*% reduction in new home reservations. This trend looks set to continue in the first two quarters of ****. This suggestsa sharp drop in future revenues for real estate agencies in the new housing sector over the next few years.

Against this backdrop, the stock of available homes at the end of the ...

2.2 Demand drivers

The main factors influencing demand from estate agents are as follows

government measures (***), detailed in section *.* property prices, as detailed in section *.* mortgage interest rates residential mobility of tenants

Bank rates

By ****, **% of buyers will have taken out a mortgage to purchase their main residence. This figure is even higher for first-time buyers (***). [***]

Between **** and ****, interest rates on mortgages will have fallen by a factor of *. Over the last two decades, access to loans has become increasingly easy, boosting the estate agency market.

However, since the beginning of ****, we have seen an increase in interest rates. This increase can be explained by the rise in European Central Bank (***) rates, which has had a direct impact on bank lending rates. Rates reached *.*% on September **, ****. The ECB's benchmark rate,Euribor, has risen from *% in June **** to *.*% today, leading to a sharp contraction in the number of loans granted and, consequently, having a significant impact on the real estate sector as a whole.

Trends in interest rates on home loans to individuals (***) France, ****-****, in Source: CSA The average term of home loans was *** months in ****, and has been rising for several years.

Number of loans granted by banks

Bank rates have a direct ...

2.3 Expectations and level of satisfaction with real estate agents

The French are particularly sensitive to the responsiveness of real estate agents, which they consider to be the primary criterion inspiring trust. Personalized advice, reputation and the agent's ability to listen also come into play. The importance attached to the agency they work for is low, with only *% of respondents citing this criterion as a trust factor in ****. Criteria for trusting a real estate agent France, ****, in Source : Ifop On the whole, the French are convinced of the added value of estate agents. Only **% of French people and **% of owners who have sold a property in recent years consider it preferable to sell it themselves directly. In particular, they are satisfied with the relationship they have with their estate agent, and with the agent's availability. On the other hand, they are more reserved about agents' ability to correctly assess the price of a property, and half of French people consider the level of agency commission to be too high. [***] Level of customer satisfaction with estate agencies France, ****, in Source : Odoxa What's more, according to the French, enhancing the value of a property is essential if you want to sell at the best price. In fact, **% of owners would be prepared to ...

2.4 Demand trends: the customer journey goes digital

While physical channels, such as contact with real estate professionals and friends and family, are still a widespread means of information when looking for a property, ad sites, apps and social networks are also highly represented among the various information channels in ****. Indeed, apps and social networks are also widely used (***). The same applies to social networks, which recorded +* points vs ****.

Information resources used to find a property France, ****, in Source: ****

2.5 France's favorite real estate agencies

The graph below is based on OpinionWay's survey of French people's favorite brands in March ****. Foreach agency, the percentage corresponds to the proportion of respondents who answered "yes ".

Stephane Plaza Immobilier topped the list, with **.*% of respondents saying they liked it. Foncia was the least popular of the real estate agencies, with only **.*% of respondents saying they liked it.

Stephane Plaza's top position in French people's preferences is largely due to the success of the TV shows hosted by Stephane Plaza on M*. Each show attracts an average of *.* million viewers. The Stephane Plaza estate agency network was launched in **** following his TV success, and now boasts over *** franchises across France.

France's favorite real estate agencies France, March ****, in Source: ****

3.1 Market structure and organization

Breakdown by category

Real estate agencies fall into three main categories:

Traditional agencies: Orpi, Century **, Laforêt Immobilier etc. Agent networks: IAD, Safti, Capifrance etc. Online agencies: Marton, Imop, Liberkeys, Proprioo etc.

The rise of agents at the expense of franchises

Franchise networks account for a quarter of the real estate sector, and **% to **% of market sales. The main players, who are developing in networks, have a large number of franchisees. For example, the Orpi real estate cooperative will have *,*** agencies by ****, Century ** has *** units, Laforêt Immobilier has *** units and Guy Hoquet l'Immobilier has around *** agencies.

However, since the early ****s, these powerful franchise networks have had to share part of their business with agent networks, the main players being Capifrance (***). These brands work with agents who operate from their own premises. The mandataires immobiliers are real estate agents who are natural persons, as opposed to salaried real estate agents. While salaried real estate agents are legally dependent on and subordinate to their employing agency, mandataires immobiliers are independent. [***]

the pace of growth for agent networks (***) will slow in **** and ****, however, due to industry concentration and rising barriers to entry. As players become larger and larger, their growth is becoming ...

3.2 Market structure

In ****, France will have ***** registered estate agencies. After a sharp fall after the crisis of ****, the number of estate agencies has seen a structural increase since ****, corresponding to the period when the real estate sector experienced an economic recovery.

Number of real estate agencies France, ****-****, in units Source: ****

The number of real estate agency employees follows a similar pattern to the number of establishments. In ****, the number of estate agency employees stood at **,***, up steadily since ****.

Number of real estate agency employees France, ****-****, in units Source: ****

Furthermore, more than two-thirds of these companies have no employees. The majority of independent estate agencies are therefore small structures managed by their sole proprietor.

Geographical distribution [***]

The following map shows the geographical distribution of estate agencies in ****. We can see that these establishments are mainly concentrated in the Paris region and in the south of the country. In fact, real estate agency activity is particularly strong in areas with large conurbations and a high level of tourism. The table below shows the number of establishments in the sector and the number of employees by region.

3.3 Digitizing the market

The real estate agency market has been strongly impacted by the digital and digital revolution and its effects, on three businesses in particular:

innovative services to improve sales tools ; platforms platforms for private individuals; increased competition from private players and online advertisers vis-à-vis real estate agencies.

Physical real estate agencies are gradually giving way to online real estate agencies or to large platforms that put individuals in touch with each other. The latter are taking advantage of the fact that * out of * French people are trying to sell their property without using a real estate agency.

Since the financial crisis, which has contributed to the slowdown in market activity, estate agents have sometimes been overtaken by transactions between private individuals. In fact, by ****, **% of all transactions will be carried out by private individuals. [***]

New digital tools are emerging, such as digital visits and real estate speed dating

With the rise of digital tools, industry leaders have improved their online sales tools with the creation of mobile applications or websites enabling virtual visits, but also real-time geolocation of properties and the number of people already interested in the property. Another trend is real estate speed dating, or live interactive virtual ...

4.1 Property prices on the rise in most conurbations

The rise in prices seen for several years has become more pronounced since ****. In the first quarter of ****, prices of older homes rose by *.*% compared to the first quarter of the previous year. New homes also saw a substantial increase over the same period, albeit a smaller one (***).

In ****, however, we see a reversal in prices for older homes, with an increase of just *.*% on the first quarter of the previous year , highlighting the downturn that began in late ****/early ****.

The chart below shows year-on-year changes in house prices. Year-on-year change refers to the level reached in a given period (***). While this rise was reinforced by the Covid-** crisis, it is a long-term trend observed since ****.

Change in prices of older homes France, ****-****, in Source: ****

Similarly, the sales price index for new homes has shown a greater increase since ****.

New home price indices in metropolitan France France, **** - ****, in index points, base *** in **** Source: ****

Although prices per square meter fell overall in ****, particularly in Paris, some cities, especially medium-sized ones, recorded increases over the same period. Bayonne and Toulon, for example, saw the strongest increases, reaching up to **% per square meter.

Property price rises by city France, ****, in Source: Baromètre ...

4.2 Rising prices benefit estate agents

The intermediary's commission rate is a key factor in the customer's decision whether or not to use a real estate agency. Real estate agencies are increasingly facing competition from free, one-to-one platforms and agent networks that can offer more attractive rates.

Since ****, there has been no ceiling on commissions, which can be set freely by each agency.

In France, these commissions (***) vary from *% to **% of the sale price of the property. [***]. Fees are generally degressive, i.e. the higher the value of the property, the lower the commission percentage. Franchise agencies are on average €*,*** more expensive than independent agencies. According to Guy Hoquet's president, this is due to the fact that franchised agencies use more sophisticated tools than independent agencies to complete a sale.

According to EffiCity, the commission ranges are as follows:

from *% to *% if the sale price is over €***,*** * to *% if the sale price is between €***,*** and €***,*** * to *% if the sale price is less than or equal to €***,***

5.1 A strict, evolving regulatory framework

Loi Hoguet: regulation of real estate activity

The activities of real estate professionals (***).

The zero-rate loan (***)

The PTZ is an interest-free loan granted in addition to another loan to buy or build a home. To qualify for this loan, a number of conditions must be met, notably concerning the property, its geographical area and the applicant's taxable income. [***]

The PINEL law allows tax-free purchases of new homes

In ****, the PINEL law catalyzed investment in new property : buyers can rent the property for * or * years (***) with tax benefits ranging from **% to **% depending on the rental period. These tax advantages are bound to encourage more new property purchases.

5.2 ALUR and ELAN laws

The ALUR law

LAW no. ****-*** of March **, **** for access to housing and renovated urban planning (***) pursues three major objectives:

to regulate real estate markets and control abusive practices ; promote access to housing, while protecting the most vulnerable populations ; develop innovation and transparency.

With regard to the activities of real estate agencies, it provides for a cap on agency fees for rental properties: these are to be paid by the landlord, except for those relating to the drafting of the lease, the inventory of fixtures, the visit to the property and the preparation of the tenant's file, which are to be paid by the tenant. these are shared between the tenant and the landlord, and are regulated according to the number of square meters of living space. [***]

The ELAN law

The Elan law, for Evolution du logement, de l'aménagement et du numérique, known as the "housing law", aims to "facilitate the construction of new housing and protect the most vulnerable".

Among other things, the ELAN law plans to clarify the status of real estate professionals working with private individuals. While real estate agents holding a professional license will still be authorized to delegate activities to sales agents or negotiators, ...

6.1 Segmentation

• Century 21 (Arche Groupe)
• Orpi
• LAFORET Immobilier (Arche Groupe)
• Guy Hoquet (Arche Groupe)
• L'Adresse
• ARTHURIMMO.COM
• Emeria (ex Foncia Groupe)
• CAPIFRANCE
• OPTIMHOME
• SAFTI
• Zillow
• Liberkeys
• Nomad Homes
• Cushman & Wakefield
• Woopen
• ERA France
• PAP.fr
• De Particulier à Particulier PAP
• La Fourmi Immo
• Expertimo
• Spirit Immobilier
• Hyppo Immobilier
• NCT immo
• J&G Conseil Immobilier
• Immojeune
• Dr House Immo
• BSK Immobilier
• A la Lucarne de l’Immobilier
• CPH Immobilier
• 3G Immo-consultant
• Gehlen Immo
• Bouygues Immobilier
• AVIS Immobilier