The real estate figures in the Alpes-Maritimes speak for themselves: while the price evolution shows only a slight decrease in the 2nd quarter compared to the 1st, the drop in activity is -25/30% across all the municipalities in the department.
Prices are starting to stabilize in the Alpes-Maritimes on a year-on-year rolling average, and they have slightly decreased compared to the 1st quarter of 2012.
This is certainly a positive point for buyers, but the decrease is not significant enough to restore the purchasing power of assets.
Among them, first-time buyers are still struggling, as their borrowing capacities have been significantly reduced with the disappearance of the PTZ+, which accounted for 30% of resales last year in the department.
The Côte d’Azur, which has a relatively high percentage of property owners with a socio-economic profile of high-income socio-professional categories or retirees, is witnessing their reluctance and resistance to considering a price drop as additional factors blocking the market, which real estate professionals from FNAIM are trying daily to unlock.
-The activity…
A significant general slowdown, around 25 to 30%, is observed in all the major municipalities of the department. Although the electoral period is not unrelated to this drop in activity, the intrinsic causes of its magnitude were known and denounced as soon as they were announced:
- the removal of the PTZ+ in resale;
- a very heavy tax on capital gains from real estate, without distinction between secondary residences and rental investments;
In addition to these flagship measures, one must add the negative psychological impact on landlords due to the upcoming rent freeze upon re-letting, even if it will mostly be a mere announcement effect (properties have, for several months, been almost re-let at the same rent, if not lower).
In these conditions, the FNAIM Côte d’Azur professionals are questioning whether the naïvely highlighted fiscal savings justifying the austerity reforms haven’t been overshadowed by the lack of revenue due to the drop in sales:
- a decrease in transfer duties, a resource for local governments;
- a decrease in VAT collected on the fees of real estate and construction professionals, especially in renovation works;
- threats to business closures and employment.
A first element of response is given by the Presidency itself, as François HOLLANDE plans to quickly return to a regime of real estate capital gains taxation, reducing the exemption period from 30 to 22 years, as it was before 2005.
-The FNAIM urges him to return to a flat deduction of 5% per year of ownership. This very positive measure will still not be sufficient to restore a balance in supply and demand, which all analysts agree will take time…
-A key proposal:
In these conditions, the FNAIM’s Bail Power 3, if implemented at the legislative level, would at least effectively fight against housing vacancy.
What is it about?
–BAIL POWER 3, AN ECONOMIC, SOCIAL, AND CIVIC ENGAGEMENT TO DEVELOP A SOLIDARITY RENTAL OFFER.
Commitment by private landlords to rent the property, as a primary residence, for at least 9 years, under rent and tenant income restrictions.
Rent caps:
Social rental sector (PLUS or PLS) rent ceilings, approximately twice lower than those in the free sector.
Tenant resources:
Social sector PLUS ceilings, about 60% of the eligible population
The property:
-certificate of housing decency established prior to rental
-properties classified in energy category A to E only
Compensations for the landlord:
100% deduction of ‘social’ rental income for 9 years
-total exemption from capital gains in case of resale after 15 years
exclusion of the property’s value so rented in the wealth tax base
land tax exemption
The public/private partnership:
With the agreement of social housing applicants, unmet requests would be forwarded to real estate professionals, who could offer this alternative solution.
