1.1 Scope and market definition
Real Estate Agencies are intermediaries which facilitate the reconcile between supply and demand. In order to enable market equilibrium within the housing industry, real estate agents oversee negotiations between sellers and buyers or owners and tenants.
Real estate agencies act for two types of clients:
- Residential customers: the majority of real estate agencies are dedicated to individuals looking to buy or rent houses, land or garages in urban and rural areas.
- Commercial customers: a minority (less than 10%) of real estate agents are focused on the search and match of commercial real estate - offices, industrial land, factories and warehouses or shops.
The activities of real estate agents have been boosted by the market for the purchase and sale of housing, which has been on the rise since 2015, although this volume of activity is expected to stagnate in 2019. On the other hand, real estate agents have to face constant competition from sales and rentals of housing between private individuals.
In a highly competitive market, the role of independent real estate agents is gradually decreasing in favor of franchises, which are better distributed and more visible. Competition from Internet tools and in particular online platforms has weighed on the search for properties, although the proportion of sales of properties between individuals has remained stable over the past ten years.
Finally, the new national regulations with the ALUR laws in 2014 and ELAN in 2018 had a direct impact on the profession's activities, without triggering growth or decline. However, there are some points to be taken into account when studying the future market.
1.2 Short paragraph on the world market?
The market for real estate agencies in France is a cyclical market strongly impacted by the various economic crises, including the one in ****. It is indeed on a dynamic of renewal after several years of instability. In ****, the market for real estate activities in France was about **.* billion euros [***]. In the ...
1.3 Summary of the determinants of the sector's activities
The table below is a summary and a qualitative change of the different determinants having a direct impact on the activities of real estate agents in France.
2.1 Three determinants influencing demand
Banks have again lowered their rates and set average rates at *.**% over ** years, *.**% over ** years and *.**% over ** years. This is a significant decrease, particularly over the flagship period of ** years, with a *.**% drop in the average barometer, or *.**% in * months.
Key rates have also fallen since the beginning of ****. This has ...
2.2 New trends and innovations are emerging from digital technology
After a low point in **** following the global housing crisis, residential mobility for tenants increased slightly: **.*% of tenants had moved in ****, compared to **.*% in ****, an increase of *.* points [***]. This rate even reaches **.*% on the ****-**** average for studios and one-bedroom apartments, more than one in three apartments has changed tenants on ...
2.3 The expectations and image of real estate agencies among clients
Expertise, security and, to a lesser extent, the services offered by the real estate agency play an essential role in the client's choice and are therefore real differentiating factors for real estate agencies (***).
Incentives to rely on a real estate agency to buy a property, France, ****, %
By order: a reduced commission ...
3.1 Access channels
Today, there are nearly ** *** agencies, including **,*** specialized agencies for individuals recorded in France [***]
For the past ten years or so, real estate agency networks have been facing increasing competition with the emergence of networks of agents whose growth is faster than that of real estate agency networks.
The real estate sector ...
3.2 Territorial distribution
Territorial anchoring is a key factor in the success of real estate networks. The geographical proximity of the agency was, therefore, the most important criterion in the choice of an agency to sell a property according to an OpionWay survey conducted in September ****.
In terms of the geographical distribution of the ...
3.3 The network of self-employed people is declining in favour of franchises
Franchise networks occupy a quarter of the real estate sector and represent ** to **% of market turnover. The main players, developing into a network, have a large number of franchisees, called branch offices. Thus, the Orpi real estate cooperative has *,*** branches, Century ** has *** branches, Laforêt Immobilier has *** branches and Guy Hoquet ...
3.4 Competition from individual trading
In **** in France, **% of transactions are now being carried out through a professional intermediary according to the data of the Notaries of France, even if the majority of the actors start the process of sale or purchase via individual trading.
Shares of sales made from private individual to private individual, France, ...
3.5 Evolution of digital technology
The real estate agency market was strongly impacted by the digital revolution and its effects, on three business lines in particular:
online classified ads ; innovative services to improve the sales tool; platforms sales assistance for individuals (***); increased competition from individual players and online advertisers against agencies.
Physical real estate agencies are ...
4.1 Real estate prices are rising in most urban areas
Between **** and ****, the prices per square metre increased by *.*% according to FNAIM (***)
The price per square metre of the apartments amounted to *,***€ in ****, an *,*% increase compared to **** (***).
According to the map proposed by FNAIM below, the regions where prices have increased the most are Bordeaux (***).
Evolution of sales prices per square ...
4.2... Which benefits real estate agencies
The commission rate is the most important element in the choice of whether or not to use a real estate agency. Real estate agencies face competition from free direct-trading platforms and real estate broker networks that can offer more attractive rates.
Since ****, there has been no more cap on commissions and ...
5.1 A strict regulatory framework that is evolving
Hoguet Act: regulation of real estate activity
The activity of real estate professionals (***).
The loan at zero interest rate for existing housing is granted for purchases in cities with less than ***,*** inhabitants
On the *st January ****, access to the interest-free loan has been facilitated to develop access to property in the ...
5.2 ALUR and ELAN laws
The ALUR law
Law n° ****-*** of ** March **** on access to housing and renovated urban planning (***) has three main objectives:
to regulate real estate markets and regulate abusive practices, to promote access to housing, protecting the most vulnerable populations, to develop innovation and transparency.
As part of the activities of real ...
- Century 21
- LAFORET Immobilier
- Guy Hoquet
- AVIS Immobilier
- ERA France
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