Why are rental properties becoming scarcer?

published on Saturday, October 15, 2022 at 07:00

Several networks of agencies interviewed by AFP believe that the number of rented properties has decreased during the last year, between 10 and 15%. The reason: the greater difficulty in becoming a homeowner, which is pushing tenants to stay longer and longer in their homes, and the slowdown in new construction, which is also beginning to weigh.

Searching for a property to rent today is an obstacle course.

In fact, rental housing is becoming more and more rare, which worries real estate professionals. The point in this trend is that it is likely to continue in the coming years.

What’s going on ?

Several agency networks interviewed by AFP believe that the number of rented properties has decreased in the last year. Foncia, a specialist in rental management, estimates this drop at 10%, the Nestenn network of agencies at 11%, the National Real Estate Federation (Fnaim) at almost 15% and the Bien’ici ad portal at 5% in the third trimester. “The big cities are very affected, but they are no longer the only ones”says Olivier Alonso, president of Nestenn.

And the demand is skyrocketing even more. The promoter Nexity thus pointed out “many more additional contacts per ad. In the first quarter, we had a third more rental applications than last year,” general manager Véronique Bédague told investors in late September. According to Bien’ici, the number of requests per ad even increased by 80% in the third quarter, even more so in the Southeast.

Whose fault is it?

The depletion of the rental supply comes first… from the tenants themselves. They are staying more and more at home.. “We had fewer tenants leaving, for one reason, which is that there is an attitude of waiting in the global chain of the French course,” Jean-Marc Torrollion, president of Fnaim, explains to AFP.

In question : increased difficulty becoming a homeowner, with the rapid rise in interest rates, and the usury rate, beyond which it is legally prohibited to lend, which excludes less favored borrowers. “Economic environment, instability, uncertainty, wear rate that does not rise as fast as inflation and therefore banks reject loans (…) all of this, indirectly, contributes to slowing down the rental market”, lists Laurence Batlle , president of Foncia ADB.

The stoppage of new construction is also beginning to weigh. This is a recurring grievance of developers: for several years, mayors have been more reluctant to authorize construction. If building permits are currently at record levels, it is a false increase, following an influx of applications in December 2021, before stricter environmental regulations came into force.

And the number of works started does not continue, with the shortage of materials and sky-high energy prices that are holding back the construction sector. “This lower supply helps freeze the market,” says Mrs. Batlle. “We can’t buy where we want to go, but we need to live there, we need housing and so it becomes a rental application,” according to Ms Bédague.

The case of thermal strainers

Since August, owners of homes with an F or G energy label, the ones that consume the most energy, can no longer increase their rent. And as of January 1, the rental of “indecent” accommodation for its consumption will be prohibited. In 2025, all G’s will follow in mainland France, then F’s in 2028 and Es’s in 2034.

If the measure is intended to encourage homeowners to refurbish their homes, professionals fear some may pull them off the market. According to a survey of professionals commissioned by Fnaim, only 32% of F and G homeowners currently choose to renovate them; and 26% to sell it.

“I think we have not measured the impact that this may have on the supply available in the private rental fleet,” fears its president. “We still don’t see it, clarifies Laurence Batlle. But it is a trend that will inevitably gain weight in the coming years.”

Last danger: the transformation of apartments into short-term tourist rentals. According to the survey commissioned by Fnaim, 6% of thermal strainer owners are considering this solution. “In many cities, seasonal rentals have prevailed over traditional rentals,” testifies Olivier Alonso, seeing how a professional clientele is moving away from traditional hospitality in their favor.

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