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    gives the floor to a business leader on a topical subject in his 20 Minutes meeting with…

  • Ex-president of the management board of RATP Dev, Laurence Batlle was appointed at the beginning of the year president of Foncia ADB, in charge of the syndic part of co-ownership and rental management.

  • It comes at a time when the real estate sector has to face up to the challenge of renovating housing known as “thermal sieves”.

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After the Covid-19 crisis, which reshuffled the cards of the real estate market, the sector is facing a new colossal challenge, that of the energy renovation of housing.

As part of its plan to fight against energy sieves, the government indeed wants there to be no more, by 2028, category F and G housing on the rental market.

This implies colossal investments for the owners.

Heavyweights in the sector, such as Foncia, which manages 60,000 condominium buildings and 400,000 rental properties, intend to play a role of facilitator and guide for the smallest owners.

20 Minutes

interviewed the president of Foncia ADB (Property Administration), Laurence Batlle.

The government wanted to take up the subject of thermal sieves and imposed an energy renovation schedule on owners and condominiums for the next few years, where are we?

Since August, the ban on increasing the rents of apartments F and G when renewing the lease has been in force.

From next January, G + apartments, that is to say the most energy-consuming of the Gs, with more than 450 kWh/m2/year of consumption, will be prohibited for rental: they will not be able to be rented or re-let them when the tenant leaves.

In 2025, Gs will suffer the same fate, then Fs in 2028. In total, this represents 17% of main residences, i.e. just over 5 million dwellings and when secondary residences and vacant dwellings are included. , we arrive at nearly 7 million dwellings, which are called “thermal sieves”.

» We are on an extremely significant issue of energy renovation,

That's to say ?

For example, you are an investor, you have an apartment in a building equipped with an oil-fired boiler, with a facade that is a veritable thermal sieve and a poorly insulated roof, you can change your windows, but you cannot change the roof or change the boiler, because it is a decision that is up to the co-ownership.

If the co-owners do not undertake this work, your accommodation will remain in the energy label F or G and may potentially fall under the scope of a rental ban.

By 2025, condominiums will be required to carry out an energy performance diagnosis and establish a multi-year work plan,

How will landlords deal with these new constraints, and what consequences can they have on the market?

We have a first case in France of a lessor, unable to re-let his accommodation, who assigned his condominium for not having worked on the energy renovation.

He asks the copro to pay his rent.

Furthermore, we expect to see an influx of F and G properties on the sale market, even if this is not a trend we are seeing yet.

But we are already beginning to feel a slight discount on these properties.

It takes between 15,000 and 40,000 euros for an energy renovation and we have between 5 and 7 million thermal sieves, which means between 75 and 150 billion euros to invest by 2028. It will therefore be essential, and this is already what we are doing on our side,

But are there already aids?

These are complex devices and one can get lost in them.

This is why we support our lessors and our co-ownerships in the search for aid and subsidies.

We already have 160 buildings, or 15,000 homes, currently being renovated, with subsidies that have covered between 40 and 90% of the total cost of the renovation, which sometimes amounts to several million euros.

We are also working with our partner banks to set up new financial instruments to help our condominiums.

Is this energy renovation schedule sustainable?

The timing is extremely constrained, it's even the most constrained in Europe.

Between the volume to be renovated, the financing capacity, the capacity of energy companies and construction professionals – when you know that there is, for example, an eight to ten month delay in having frames – the timetable seems very ambitious to me, and at one time or another, it will have to be fitted out.

We mustn't lose the objective of renovating our buildings, but it's a long-distance race, not a 100 meters.

What is the situation on the real estate market, do you already have an initial assessment for the year 2022?

The market continues to do well, with volumes expected to reach around 1.1 million transactions in 2022, down around 10% from 2021, but this was a extremely strong year.

2022 will go down as a very good year.

On prices, we are on a continued rise, a little over 4% on average, with fairly significant geographical disparities.

When Paris and the inner suburbs are stabilizing prices, provincial cities are on the rise.

It's a two-speed market.

But Paris and Ile-de-France generally set the tone, don't they?

Isn't it worrying for the future?

I would not say that, because the Covid-19 has nevertheless reshuffled the cards.

The big cities and Paris attract less than the other sectors from now on.

We see it with the attraction for single-family homes, which is still there, these are properties that go quickly and at sustained prices.

Won't the market tension come from the banks, with borrowing rates rising since the beginning of the year?

In volume, the number of loans granted fell by 10 to 11% at the end of July compared to July 2021. Loan refusals seem to have accelerated lately, in particular due to a wear rate [maximum rate at which a loan can be granted] which increases slightly, which therefore leads to a reduction in the banks' margins.

This affects more first-time buyers, therefore the youngest.

But even if the borrowing rate has increased and will increase further, it remains at levels that are historically low.

The difference between the borrowing rate and inflation remains very favorable to the consumer, so in this somewhat anxiety-provoking atmosphere, it remains advantageous to invest in real estate.

Despite this context, real estate therefore remains a safe haven?

How do you envision 2023?

Yes, real estate remains a safe haven, prices are not falling.

We are certainly in a "downward" trend in terms of volume, but the evolution for 2023 remains very complicated to anticipate, because it will be closely linked to the geopolitical environment.



In addition to the challenges of energy renovation, other measures, such as rental permits and rent controls, have been implemented in several metropolitan areas.

Are they good measures to fight against abuse, or does it just tense the real estate market, as some denounce?

It should be kept in mind that the private rental stock in France represents almost 7 million dwellings, financed by private landlords, who own an average of 1.2 dwellings.

We are not talking about “awful capitalists”, but small owners who rely on these homes for their pensions.

They therefore carry out a very important mission in favor of housing.

However, there are many constraints that weigh on their shoulders today.

Some are normal: it is out of the question to rent indecent accommodation, and we must severely penalize those who do not respect these rules.

However, the vast majority are reasonable people who should be encouraged.

There is already great tension on the rental market, as we can see with the turnover rate of tenants which is collapsing, because there are fewer properties on the market,

and because less new housing is being built.

We should not add a housing crisis to the energy crisis we are going through, which could happen if we massively withdraw F and G housing from the rental stock.

Economy

Real estate: Is the rental investment in a "thermal sieve" worthwhile?

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Real Estate: How to renovate your "thermal sieve"?

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