Franciliens prioritize finding housing despite the environmental impact

Only 316 days until the opening of the Olympic Games and 349 days until the Paralympic Games of Paris 2024. As the question arises of how the 45,000 volunteers and 45,000 security agents, police officers, and gendarmes will be housed, the residents of Île-de-France seem satisfied with where they live.

According to a survey by Ifop for the Notaires du Grand Paris in partnership with La Tribune, only 28% of respondents say they want to live elsewhere. However, behind these overall percentages, there are varied situations. For example, 77% of Parisians and up to 80% of Yvelines residents do not want to move, compared to 44% of inhabitants of Île-Saint-Louis. Similarly, 81% of the affluent (earning more than €2,500 per month) claim to be satisfied with their homes, compared to 43% of the poorest (earning less than €900 per month).

The percentage of renters considering buying continues to decline. In a context of difficult access to real estate credit due to soaring interest rates, now close to 5%, the percentage of renters considering buying their first property continues to decline, dropping from 27% in 2022 to 23% today. This is the case even though 63% of them state that they are dissatisfied with their living situation. The majority (55%) of respondents believe that the Grand Paris project will not facilitate access to homeownership. In fact, 78% of Île-de-France residents believe that credit conditions have become more challenging. 82% believe that becoming a homeowner is much more difficult than it was 20 years ago in Île-de-France, and that homeownership has become almost impossible for younger generations.

The dream of becoming a homeowner remains in people’s minds. 77% believe that in the long term, it is still beneficial to become a homeowner, and 74% believe that real estate is the best investment, compared to 29% for the stock market. And this is true regardless of family situation: only 47% believe that being an heir is necessary to become a homeowner.

“Access to homeownership is extremely difficult, but it still holds a status dimension. There is no loss in the value attributed to real estate. Île-de-France residents remain attached to private property,” says François Legrand, Head of Opinion and Business Strategy at Ifop.

Not surprisingly, over half of the respondents (55%) perceive the current political and economic context as unfavorable to buying real estate. Among the reasons cited are the high prices of properties in Paris and certain municipalities (62%), and the increase in interest rates (51%). Among homeowners, 52% even fear having to sell their property at a lower price than when they acquired it.

Environmental standards sometimes hinder sellers and buyers. In addition to these factors, there are also environmental standards. Since January 1, 2023, and up to 2025, 2028, and 2034, the worst-performing properties, as well as those classified as G, F, and E, are and will be prohibited for rent. 26% and 35% of homeowners see the Energy Performance Certificate (DPE) and the foreseeable costs of insulation or renovation work as factors that could lower their selling price.

Nevertheless, 53% of them do not intend to sell their property due to this progressive prohibition. Luckily, 54% of buyers are not willing to purchase a property with poor energy efficiency, these homes that consume too much energy and/or allow heat to escape in winter and heat to enter in summer. These properties are even now referred to as “thermal kettles” considering the recent heatwaves.

In reality, 69% of people do not know the energy performance rating of their homes, with significant disparities based on age, monthly income, and occupancy status. For example, only 22% of students (18-24 years old) know their rating, compared to 44% of young professionals (25-34 years old). Not surprisingly, the wealthier individuals (42%) have a much better grasp of this information than the poorer ones (19%). The same is true for homeowners (42%) compared to renters (20%).

For those who have the possibility to move, proximity to public transportation remains a priority (43%) ahead of interior space (33%) and an outdoor view (33%). On the other hand, compliance with environmental standards is seen as the second to last concern, receiving only 8% of mentions. In other words, Île-de-France residents want housing at any cost, regardless of the impact on the planet.

These perceptions are confirmed by the latest figures from the notaries. According to the Notaires du Grand Paris, the real estate market in Île-de-France is characterized by “very difficult access to financing” and “the highest housing loan interest rates in ten years.” In the second quarter of 2023, sales volumes of old properties decreased by a quarter in Île-de-France compared to the same period in 2022, although the latter was the best in thirty years.

“The price drop [from 5 to 6% in a year] provides some relief to the market, but the drop is largely intended to restore household solvency. The outlook remains grim,” notes the notaries.

The market for old houses has dropped by 27%, particularly by 33% in the inner suburbs compared to 25% in the outer suburbs. This is due to three reasons: the increase in energy costs affecting homeowners of houses rather than apartment owners, the resilience of prices more than in collective housing, and the post-Covid purchasing phenomenon that has “dried up” the market.

Apartment sales have also declined by 25%: 23% in Paris, 24% in the outer suburbs, and 26% in the inner suburbs. Compared to the average of the past ten years, this market is somewhat limited: -10% in the inner suburbs, -2% in the outer suburbs, and -1% in Paris. Regardless of the energy label of the property, the capital will always attract investors…

Leave a Reply