Almost 900 estate agents in France closed their doors in 2023 due to falling property sales, a new report has found.
The study by credit risk consultancy Altarès found that 887 estate agencies went into liquidation or receivership last year, including both independent agencies and some branches of larger chains.
Not only is this an increase in closures of 116% compared with 2022, it is also the highest figure since the housing crisis of 2009.
House sales at record low
Rising interest rates and a cost of living crisis have contributed to a difficult market in recent months, with the number of property sales declining significantly.
A new report from the Fnaim (Fédération Nationale de l’Immobilier, France’s leading union of estate agents) found that 875,000 non new-build houses were sold during 2023; a near 22% drop from the 1,115,000 recorded in 2022, and the sharpest year-on-year drop for at least half a century.
Average mortgage rates are still above 4% over a lending term of 20 years, said Stéphane Fritz, president at national estate agency Guy Hoquet Immobilier, to FranceInfo. The group has seen a 19% drop in transactions in 2023.
“The French public has lost 15% of their purchasing power in two years,” the Fnaim report added, saying that the situation had hit first-time buyers particularly hard.
Mr Fritz said that many of the agencies that had gone out of business as a result were small agencies that were just starting out, or those that took a state loan during the Covid crisis in 2021 and are now struggling to pay it back.
Mr Fritz sought to play down the issue, however, saying that the number of closures still only represents 3% of agencies nationwide.
More closures in 2024?
Yet, Olivier Princivalle, president of the Fnaim Grand Paris, said that there could be many more closures this year (2024).
“We think that this figure will almost double in 2024,” he said. “We are going to lose jobs, we are going to have a lot of salesforce withdrawals and, as a result, we are going to have empty shops.”
He has called on public authorities to take action to help kickstart the market but is sceptical that there will be much change in the coming months.