Changes in regulation of energy efficiency in France
Recently, everyone in the French real estate industry is talking about the current changes in the country’s energy efficiency regulations.
Implemented in July 2021, the law on rents and the classification of a property in terms of energy consumption, will have major effects on the real estate market in the years to come. MR Agency Real Estate brings you some details to help you make the most suitable decision for your future investments in the sector. (Discover our article on investing in Real Estate)
What is the DPE ?
If you’ve visited, rented, sold, or bought a house in France, you have certainly heard of a DPE before. This acronym – which stands for Energy Performance Diagnosis – indicates a scale from A to G of a residence’s energy efficiency.
Beginning in July 2021, the DPE must be done by a certified diagnostic technician and is valid for 10 years.
The price of a DPE certification ranges from 100€ to 250€.
Below, you can find a tabular with the different categories of DPE classification.
What has changed so far ?
Since the beginning of 2022, the law implemented an obligation for landlords to include a price range of annual energy consumption and DPE classification in a rental advert both on- and off-line.
Furthermore, starting from the 24th of August of 2022, the incrementation of rent for apartments whose DPE is classified G or F is no longer possible, regardless of inflation and market evolution.
As of 2023, all the DPE certifications completed between the 1st of January 2013 and the 31st of December 2017 no longer have value since the beginning of the year.
Moreover, it became unlawful to rent a property whose annual energy consumption is above 450 Kwh/m2, which is underneath the class G of the DPE.
Last but not least, starting in April, a mandatory energy audit will have to be carried out before placing a property classified DPE G or F for sale on the market.
In fact, as of 2025, the properties whose DPE classification is G – the properties whose annual energy consumption is above 421 KWh/m2 – will be considered unfit for rent. This category currently represents roughly 7% of the apartments and houses in French territory.
2028 will see further limitations: owners whose estates were placed in class F of energy consumption -that is, those properties whose annual consumption oscillates between 331 and 420 KWh/m2 – will no longer be able to place them on the market for rent.
These properties represent a staggering 10% of the French real estate market.
A little further down the line, in 2034, residences whose certified DPE falls into category E – which indicates an annual energy consumption between 251 and 330 KWh/m2 – will also be considered unsuitable for placing on the market for rent.
In conclusion, in a little more than a decade, the three last categories of DPE energy efficiency will be excluded from the real estate market in the country.
In the Paris region, apartments and houses classified G, F, or E make up around 45% of the total market.
The effects on the market
The changes in regulation have already had visible effects on the Real Estate market in the country.
On the other hand, the new regulations have negatively influenced real estate prices and have recorded a fall of 17%.
Although it is impossible to foresee what will happen in the following years and how the market will develop, it is possible to imagine that the value of assets with a higher DPE classification will see a steady increase in rent and sale value – while properties whose energy consumption falls under classes G, F or E will continue to decrease.
Nevertheless, these changes can also represent an opportunity for smart investors, as the French government offers subsidies and tax reductions to owners who decide to improve the energy consumption of their residences.