Quelles perspectives pour la Proptech en 2024 ?

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The price of real estate increased by 27% between 2015 and 2022, so the average cost per square meter of apartments in France is still too high for the market to unwind. However, if we take into account that several months usually pass between rate increases and selling prices falling, we are seeing early signs – if timid – but encouraging.

According to a recent study by Century 21, the long-awaited decline in commodity prices (-3.4% in 2023) is taking place. A second study from Meilleureagents.com confirms the trend and expects a 4% decline in 2024. Additionally, rates should stabilize in the first half of 2024, according to several analysts.

While this represents a glimmer of hope for the entire ecosystem, it should be noted that certain events still risk maintaining uncertainty. The 2024 Olympics is a threat for some, an opportunity for others, the risk of crippling the Île-de-France rental market and damaging many players until the end of the year: rental property professionals, service providers, proptechs, etc. real estate network L’Adresse, 35% of brokers said they have already met owners whose houses will be cleared in the first half of 2024, but want to keep them available for rent during the event.

Market consolidation will continue

The real estate and tech funding crises have led to a return to “normal” for proptech, which – like other industries – is also subject to record fundraising and skyrocketing valuations. The consequence of this double crisis, the collapse of investment in French proptech: -49% of value in the first half of 2023 according to the Techmind barometer.

This sudden slowdown didn’t give some proptechs time to prove their business model or turn around. And those not in receivership or liquidation readily admit they are feeling the shockwave and are rationalizing costs.

Sell ​​to survive? Buy back to increase your customer volume? Diversify? Adapt your technology to new goals?

If the first signs appeared in 2023, 2024 should confirm that the era of “gadget” technology is over and further support the need for a robust business model from the beginning of the company and a long-term strategy, independent of fundraising. From now on, startups will have to respond to critical issues or risk not finding their niche or being replaced. This observation is the same whether they are aimed at an individual or a professional target: companies and large groups are also hit hard and must be just as resilient.

However, the consolidation of the market remains a positive signal: it is proof that it is gradually maturing. It is also an opportunity to create leaders who, by merging or consolidating with competitors, will become more attractive to investors.

Energy renovation and decarbonization of buildings: locomotives of 2024

Another glimmer of hope, and last but not least, the energy renovation segment is performing well, allowing Proptech to increase its median valuation multiple by 50% by 2023 (Avolta Partners, 2023) despite falling prices. While the French regulatory context is set to tighten this year with the entry into force of new provisions of the Climate and Resilience Act and energy prices remain uncertain, this trend is expected to continue throughout the year.

In addition to the renovation, France reaffirmed its ambitions to decarbonize buildings during COP28. Building Breakthrough, an intergovernmental initiative that aims to make resilient buildings with near-zero greenhouse gas emissions the new standard by 2030, should provide impetus for the decarbonisation of buildings, particularly those that focus on components and construction. Although the sector is responsible for 20% of greenhouse gas emissions worldwide, this segment is crucial to achieving the goals set by the Paris Agreements.

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