The weather was the favorite topic of Mipim festival-goers. Some forecasters saw the rain showers in Cannes as an illustration of the state of the real estate market. Others preferred to read in the rare light showers a glimmer of hope for their business, their asset segment, their location.
More seriously, the weather is a key issue in business life. There is the short term, that of the economic situation. And then there's the long term, when it comes to major trends.
Frankly, the weather is still bad for real estate. And the phrase most often heard in the aisles of Mipim was: "We've hit rock bottom. No one dared to ask when he'd get his head out of the water.
Over the long term, Nicolas Namias, Chairman of the Management Board of Groupe BPCE, delivered a fairly accurate analysis of the situation facing the real estate industry. And who better than someone who doesn't have his nose to the grindstone to identify trends in a sector?
For the BPCE boss, structural evolutions are going to overtake this economic situation. Nicolas Namias, who took advantage of Mipim to announce the launch of a full-fledged business line dedicated to housing and real estate, identified three main trends.
Firstly, new societal and behavioral evolutions, and new uses that require real estate supply to be adapted, including in terms of building morphology. For example, we will need to produce more compact housing to meet the growing demand from single-parent families.
Secondly, a new financial paradigm with persistently high interest rates. "We are coming out of a period of monetary subsidization of the real estate sector", insisted Nicolas Namias. The enchanted parenthesis of zero or even negative key interest rates seems to have come to an end. Translation: values will have to be adapted to this new context, which can be painful when we see the French 10-year yield hit a new record high of 3.60%.
The final conviction of the BPCE CEO is that real estate, which is always in close dialogue with public policy and is even a net contributor to state and local authority finances, can no longer rely on public spending. In other words, the race for yet another tax carrot is futile. In exchange, the State would be well advised to simplify the path rather than pull out the stick.
This is where future governments will be working. Simplify standards, make the legislative and regulatory framework more durable, and perhaps (one day) put their trust in the many players involved in the city's development, be they public or private.