Real Estate: Should You Take the Risk of Buying a Home with Poor Energy Efficiency?
The most energy-inefficient homes, classified as F and G—those commonly referred to as “energy-leaky homes”—will be subject to rental bans in 2025 and 2028, respectively. Their prices have plummeted by 15 percent. Is this a bargain?
As with small maid's rooms measuring less than 9 m², this penalty has caused property prices to drop, with discounts of up to 15% depending on geographic location.
A financial windfall for aspiring homeowners? Perhaps. According to a study conducted by OpinionWay for BigMat, 46% of French people see this as an opportunity for a profitable investment, particularly young adults aged 25–34 (58%), who are more affected by the challenges of financing their dream home.
And indeed, for those who are ready to undertake energy-efficiency renovations, buying a “thermal sieve” may seem like a good deal.
However, the same survey reveals that while DIY enthusiasts view this type of investment favorably (57%), in reality, 4 out of 10 French people would consider entrusting the entire project to professionals (39%), while 36% believe they can do part of it themselves and 32% feel capable of handling everything on their own.
Since the desire to save money is a key factor in purchasing a property known to be energy-inefficient, people aged 25–34 are more likely to undertake some of the renovations themselves (48%) or all of them (42%).
In short, to make sure the bargain stays a bargain, you’ll have to roll up your sleeves.
According to a cost study published in 2019 by ADEME (the French Environment and Energy Management Agency), improving a single-family home’s energy efficiency rating by one class on the Energy Performance Certificate (EPC) would require an average investment of 16,000 euros, and 26,000 euros to improve it by two classes.
For a rental investment project, retrofitting will be mandatory to ensure the property can be rented in the future, given that properties rated F and G will be prohibited from being rented in 2028 and 2025, respectively, and that by 2034, properties rated E will also be subject to this restriction. Once all renovation costs required to bring the property into compliance with current and future standards have been calculated, it will be possible to determine whether or not it is a sound investment in light of local market conditions.
When purchasing a primary residence, the future owner is free to decide whether or not to carry out the renovations—or to take their time doing so—even though energy bills, given the skyrocketing cost of electricity, should serve as a strong incentive.
Another factor to include in the calculation is financial assistance. MaPrimeRénov, energy grants or energy-saving certificates (CEE), the “Coup de Pouce Énergie” program, zero-interest eco-loans, reduced VAT rates, assistance from local and regional governments, as well as the Denormandie program… There are dozens of assistance programs available to help finance your renovation projects. According to ADEME, subsidies cover an average of 30% of the cost of the work, with an average grant amount of €4,900 per household.
