Real estate bankruptcies are exploding and there is no end in sight

The number of estate agent bankruptcies is exploding and is set to surpass its record since the 2009 crisis, the National Real Estate Federation (Fnaim) warned on Wednesday. Between May 2023 and April 2024, 1,120 agencies went bankrupt, more than doubling (+114%) in one year, according to Fnaim. “This trend continues», noted its president Loïc Cantin, and the number of failures should surpass the record of 1,385 reached in July 2009, in the midst of the crisis.

The employment implications mainly affect sales representatives, the self-employed and those paid per transaction, whose numbers have decreased by 15% in less than a year, while the number of paid representatives has remained stable. “Clearly, our business is weakened in a context of reduced activity, a context where transactions are difficult, financing is less available and constraints are increasing.“, confirmed Loïc Cantin.

In 2023, 887 real estate agencies declared to stop payments and 23 others started protective proceedings, i.e. Figaro company Altares, the main specialist in this matter.

The threat of political instability

The number of transactions, which continues to decline, should stabilize around 800,000 per year and represent “prerequisites for a market restart“, he hoped. The stabilization of sales is recorded by the decline in real estate prices, which now affects all types of territory. But the organization’s forecasts could be disrupted by political instability, highlighted by the progress of the far right in the European elections and the dissolution of the National Assembly that followed in France.

Markets react to political instability, and political instability can bring credit crunch and financial crisis to our country; so this is an indicator that we will be watching in particular“, promised Loïc Cantin. Regarding the possible rise of the extreme right to power after the June 30 and July 7 parliamentary elections, “regardless of the economic solutions that can be proposed, (…) we will always play our role as arbitrators and mediators“, he argued. However, President Fnaim recalled “fundamental disagreement» of his organization with the National Assembly of National Preferences, one of the key points of its program. “We are signatories to the agreement with SOS Racisme on the prohibition of discrimination, our profession is regulated today, it cannot discriminate“, recalled Loïc Cantin.

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