Real Estate: One in Five Homes Sold Is Energy-Inefficient

While the breakdown of existing-home sales by energy efficiency rating has remained virtually stable in recent years, 2022 and the first few months of 2023 stand out for a sharp increase in the share of sales of the least energy-efficient homes (energy efficiency ratings F and G), which now account for 18% of sales—a 7-point increase over two years.
 

This trend is evident across all departments, although a few stand out from the general pattern. These are primarily the departments that already had a high share of sales of homes with F and G energy efficiency ratings. Savoie and Haute-Savoie are the only ones to see their share decline slightly. Conversely, many departments in the Southwest had a low proportion of sales of energy-inefficient homes in the second quarter of 2021 but saw that proportion more than double by the second quarter of 2023, as was the case in Tarn-et-Garonne, Landes, and Pyrénées-Atlantiques.
 

One out of every three sales in cities with more than 100,000 residents…
 

In nearly all cities with more than 100,000 residents, the share of sales of the least energy-efficient apartments has increased. The sharpest increases—of at least 5 percentage points—were observed in Le Havre, Rouen, and Orléans.
 

In 2022, about one in three sales of apartments with F or G energy ratings took place in a city with more than 100,000 residents, compared to one in four a year earlier—an increase of about 10 percentage points—while this increase was only 2 percentage points for all sales in the multi-family housing market.
In the Île-de-France region, while the share of F- and G-rated homes sold fluctuated around 10% by department in the second quarter of 2021, it rose through the second quarter of 2023 to over 20% in the inner suburbs and even higher in Paris. In fact, in the capital, apartments sold with an F or G rating accounted for 15% in 2021, 29% in 2022, and as much as 32% in the second quarter of 2023. More specifically, the proportion of Class F sales rose from 11% to 17%, while that of Class G sales tripled, from 4% to 12%. As of early 2023, the trend still appears to be on the rise, with older Class F and G apartments accounting for 18% and 15% of sales, respectively, in the second quarter of 2023.
 

While in previous years the impact of the energy label on housing prices was less significant for apartments—particularly for the lowest-rated labels (F and G)—this is no longer the case in 2022. In fact, the price discount associated with an F or G rating compared to a similar Class D apartment is significant in all regions of mainland France (excluding Corsica).

For the record, since the beginning of 2023, housing units with a G energy efficiency rating on their energy performance certificate (DPE) are no longer considered habitable and are excluded from the rental market (new leases). Since late August 2022, it has also been prohibited to raise rents for housing units rated F and G under the Climate and Resilience Act of August 2021, which calls for a gradual increase in energy efficiency standards for rental housing through 2034.

(Sources: Notaires de France)