In neglected Paris, rents for furnished apartments are declining

Over one year, the price of furnished rentals recorded a drop of 1,1% in Paris at the end of February and the number of ads tripled, with an increase of 204,8%, according to data communicated by the SeLoger site. com to AFP.

"When, on a stock of 500.000 housing units, you have 20% of the stock (that of furnished apartments, Editor's note) which ends up in a heckled economic segment and which takes a reorientation decision, it is not trivial", explains to the 'AFP Jean-Marc Torrollion, President of the National Federation of Real Estate (Fnaim).

According to him, "there are first rent adjustments being made on small dwellings", but for the moment it is too early to quantify them.

In Paris, 500.000 homes are part of the private rental sector, including 110.000 furnished, the share of this segment having increased considerably from 14% in 2006 to 22% in 2017, according to data from Fnaim.

An "unbalanced market"

This growth was driven by the emergence of tourist furnished rentals but also by the choice of many executives to rent a Parisian pied-à-terre to leave their families in the countryside.

Now, "natural selection takes place between the quality of goods and some (owners, Editor's note) are correcting certain excessive effects of a clearly unbalanced market," adds Mr. Torrollion.

At Imodirect, nearly half of the furnished apartments were rented out before the crisis as a pied-à-terre to executives, according to Arnaud Hacquart, the president of this agency specializing in rental management.

"Today, if we put the property at the capped rent, we no longer rent" he explains.

For furnished apartments in Paris, a rent control system provides for a reference rent and an increased rent according to different services (cellar, view, terrace, etc.)

In January, Mr. Hacquart sent a letter to his Parisian landlords warning them about the inversion of the supply and demand curves in Paris, urging them to "operate a significant reduction in the amount of the proposed rent" .

"A year ago, after half a day we were forced to withdraw the ad" in front of the influx of requests, "now if we don't lower the price we have no demand". According to him, "it is new".

A "rather safe investment"

Today, "the tenants have the choice, they take their time, they analyze, say + there is a view on a cemetery, I do not take +, these are things that we did not hear before", adds he does.

Some owners have to agree to a reduction of up to 20% if they do not want to keep their property on their hands, while credits and charges continue to run.

This is the case for this owner of a 47m2 in the 17th arrondissement of Paris rented until October 1.700 EUR and increased in January to 1.400 EUR.

"It was a rather safe investment. I had not imagined a few years ago to find myself in this situation in Paris," he told AFP on condition of anonymity.

At Book-A-Flat, in one year the supply of furnished apartments has increased by 60% and is "higher than demand, unheard of" in Paris, explained Stanislas Couteaux, co-founder of this agency in mid-March. specializing in the rental of high-end goods.

And some owners "who are in debt, attracted by the profitability" of tourist rentals, "either return to the traditional market, or put up for sale", he commented, adding that out of some 3.000 properties managed by his agency, a hundred are furnished tourist accommodation returning to the long-term market.

Over the first two months of the year, the rents for the furnished apartments it manages fell by 7%, he adds.

However, the phenomenon of rent erosion does not affect empty rented properties because, according to professionals, between confinement and teleworking, tenants need to feel at home, with their own furniture and decoration.