2021 review of the entire residential real estate market

The upward trend, driven by the landing of the yield rates of the other classes (mainly office and logistics) and by still very low borrowing rates, seems to be confirmed for the start of 2022. We will still have to remain attentive to the evolution and implementation of new environmental regulations as well as the impact of the Russian-Ukrainian conflict.

The New Block Sale market confirms its attractiveness

With a total volume invested of 7,4 billion euros, i.e. a 7% increase compared to 2020, the block sale market therefore broke a new record in 2021, with 299 transactions.

The nine, figurehead of the investors, represents 57% of this market. The marked preference for construction is explained by the change in strategy of developers (block sale vs. lot by lot). It should continue with the promulgation of the Climate and Resilience law, which encourages investors to favor the most energy-efficient housing.

The Old Market benefits from a marked increase in 2021

With 1.178.000 sales in 2021, an increase of 15% compared to 2020, the residential real estate market in the old sector has reached a record level. This increase is found in particular at the level of prices with a national evolution for houses of 9%, and for apartments of 4,6% (a difference which has not occurred since 2016). The phenomenon could be linked to a post-health crisis effect driven by a greater need for space and exteriors and by the generalization of teleworking, but also to the sharp rise in prices in large cities which has forced part of the more modest population to move away from city centres.

Although a slight slowdown in prices is felt on the Parisian market, with an average of €10/m² (i.e. -600% intramural and -0,9% in Ile de France), the market in the Regions is doing well. gambling – particularly in peri-urban and rural areas – with significant growth in volumes (+0,8%) and prices (+15,4% for houses and +9,4% for apartments).

“In the medium term, the rise in borrowing rates at the start of 2022 coupled with the general inflation of construction costs could have a greater impact on sales volume and prices in the years to come. » Stéphane Imowicz, President of IKORY

The new home market is picking up slightly despite the impact of the health crisis

For the new residential market, the year 2021 ends on a positive note with more than 116.000 sales made, an increase of 15% compared to 2020. Listings for sale follow the same trajectory with an increase of 21% over a year. The commercial supply, for its part, contracted with a drop of 2% compared to 2020 and 4% compared to the ten-year average.

The new home market is suffering from a shortage of products - despite a 19% increase in building permits over one year - which can be explained by rather scarce and expensive land, sustained demand, rising construction costs, too long administrative delays and too many appeals jeopardizing the economic profitability of the projects.

In the medium term, the development of new construction may be more impacted than today by more complex environmental regulations to put in place and their consequences in terms of recovery.

Residential real estate in transition

The French residential real estate stock is subject to major regulatory changes with, on the one hand, the promulgation of the Climate and Resilience law in August 2021 and, on the other hand, the implementation of the RE2020 standard since January 1, 2022. for new constructions.

Regarding new operations, RE2020 only concerns building permits filed after January 1, 2022 (for residential buildings); there is therefore still very little hindsight on the real impact of the application of the regulations.

Regarding existing buildings, 4,8 million dwellings are classified F or G (33% in inner Paris) and are therefore ultimately condemned to be withdrawn from the rental market if they are not renovated and this from 2025 for the most degraded of them. There is an increase in the sale of energy degraded housing (8% for apartments, 7,4% for houses), showing the will of the owners to arbitrate in priority their assets condemned to obsolescence.

The renovation of the existing stock is therefore a major challenge. Especially since a study by the Notaries of France shows that in 2020 residential assets generated a plus or minus in value compared to the average depending on their energy class. The discount goes up to 20% for houses and 14% for apartments. However, it is difficult to deduce the presence of a green value or a brown discount, as the thermal obsolescence of an asset never comes alone.

“The restrictive aspect of the new regulations put in place will necessarily manifest itself in the volume and price statistics in the coming months. If we currently lack data to follow these transformations, institutional and private owners are already on the ground to react: greening of the park, arbitration of thermal sieves, energy renovation works, the market has understood what was at stake and is already preoccupied with finding answers. » Stéphane Imowicz, President of IKORY