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Bankruptcies of real estate agencies doubled in 2023

Figures certainly expected, but still edifying.

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Bankruptcies of real estate agencies doubled in 2023

Figures certainly expected, but still edifying. In 2023, 887 real estate agencies declared themselves in cessation of payments and 23 others initiated safeguard procedures, for a total of 910 failing real estate agencies, according to Le Figaro the Altares firm, a major specialist in the issue. This is the highest level since the record of 2009, when the number of failing real estate agencies peaked at 1,244.

“Across the economy, the number of failures has jumped by almost 30% compared to 2022. For agencies alone, the increase reaches 116%,” explains Thierry Millon, director of studies at Altares, i.e. more than a doubling in the space of a year. “That’s four times more than other companies. And this perfectly reflects the tensions and difficulties experienced by this sector,” he analyzes.

If it is still possible to see the glass half full - the record has not been broken - it is difficult to see the horizon brightening any time soon according to Thierry Millon. “The current trajectory does not really offer any prospect of improvement. So we can assume that the ceiling of 1000 failures will undoubtedly be crossed in 2024,” anticipates this specialist, who nevertheless expects a deceleration in the rate of bankruptcies.

These serial failures of real estate agencies could well be the other side of the boom that the profession has experienced over the last decade. “As the drop in household budgets and the rise in rates have led to a drop in real estate transactions and therefore a shrinking of the pie, it is not surprising to see such a number of agency failures,” explains Thierry Millon. And “the number of transactions has fallen so low that the pre-Covid level of activity cannot be regained anytime soon,” he adds.

However, “the drop in rates coupled with the slowdown in inflation should restart the machine a little. Individuals will be able to more easily undertake renovation work on their homes, work that they had given up on last year. The real estate stock will be all the more attractive, which will help to increase the number of transactions,” explains the expert.

If rates become acceptable again, more real estate is available and prices are attractive, then the sector will regain strength, summarizes the Altares research director. However, “the concomitance of these three points is not planned for the coming months,” warns Thierry Millon. The economy should recover in the second half of the year, but it is difficult to say whether this will be enough to turn around the real estate market.” Answer in 2025 therefore.

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