The interest of the French in real estate is not waning, driven by the desire for more space and comfort

With the generalization of teleworking, real estate projects are organized around new expectations: to gain space and get closer to nature to gain in comfort of life. The criterion of brightness is also increasing in power: the confinements of 2020 have clearly left traces! While many working people now navigate the week between their office and their home, interest in semi-primary residences is growing. A dynamic that largely benefits medium-sized cities and rural environments, but above all announces a new record volume of transactions in old real estate, which could even beat that of 2019, the best year of all time!

Boosted demand in the regions and houses that are the object of covetousness

Over the first 9 months of 2021, demand grew by 18% nationally. If this increase is to be put into perspective in view of a chaotic year 2020, it nevertheless confirms the very real appetite of the French for stone. Investors, whether they are seasoned or new, take full advantage of interest rates of around 1% over 20 years. The French remain very active and are looking for this safe haven which seems hermetic to the crisis. Demand for houses is growing strongly (+ 18% nationally) compared to apartments (+ 10%), reflecting the desire of the French to gain space and have an exterior.

Paris is returning to growth after a rather calm 2020, with demand up 12%. Île-de-France, for its part, confirmed its dynamism (+ 13%), in particular the inner suburbs where the supply of houses is still abundant. In the regions, we observe a similar phenomenon: buyers move away from large metropolises to reach the outskirts, where they seek space, greenery and calm. Within Laforêt agencies, many prospective buyers express their desire to cultivate their vegetable garden to gain autonomy and food quality, reflecting new aspirations. After the energy quality a few years ago, it is therefore now a gain in comfort that is sought.

An offer that is still declining in an already very tight market

Nationally, the supply of goods available for sale is down by 18%. A trend that can be explained by two concomitant phenomena: on the one hand, first-time buyers who have no housing to put on the market; on the other hand, owners of houses or apartments with terraces or gardens, who ultimately hesitate to leave an already comfortable situation.

In Paris, however, the supply seems to be gradually reconstituting (+ 24%), but this increase in reality only represents a few additional goods per branch. This development is mainly due to the return to the market of furnished tourist accommodation in large cities, where tourists are still struggling to return.

In Île-de-France, the supply is sluggish (0%). Houses show a slight decrease of 6% while apartments progress (7%), rebalancing the market. Finally, the regions once again illustrate their dynamism, with an offer which fell by 26% over the first 9 months of the year. Real estate agencies have never had so few properties to offer and the market is in tight flow, especially for single-family homes.

Towards a new record year for transactions

If the number of transactions increases by 23% over the first 9 months of the year vs 2020, which seems logical after a complicated year, it is interesting to note that it also increases by 12% compared to 2019, year of all records in old real estate. Sales are accelerating for both houses and apartments. Rental investment stimulates the purchase of small surfaces, with first-time buyers who also want to take advantage of exceptional financing conditions.

Paris is rediscovering its colors, with positive activity compared to last year (+ 27%), especially over the last 3 months. The increase in sales volume in Île-de-France is in line with the national dynamic (+ 23%), while the regions are also very active (+ 22%). Everywhere, however, turnover is hampered by a depleted stock of goods.

A regular price increase, except in Paris

Overall, prices per m2 recorded a slight lull, but nevertheless continued to progress with + 4,9% nationally, to € 3 / m345. If the euphoria of the first half of the year subsided a little during the summer, the scarcity effect supported the increase with houses which carried most of it (+ 2% vs. + 7,1% for apartments ).

In the regions, prices are racing: the overall increase is 7,3% (to € 2 / m398), or even 2% for houses! This development is linked to the arrival of city dwellers with high purchasing power who do not hesitate to buy at a high price the good to which they aspire.

In Paris, the decrease observed last year is amortized (-0,8% to 10 € / m430). A situation which is explained in particular by a Parisian market still deprived of its international clientele. In Île-de-France, we see the exact opposite of what is happening in the region. While prices rose by 2% on average (to € 4,3 / m4), this increase concerns more apartments (+ 543%) than houses (+ 2%). It seems that we have reached a plateau, with buyers who can no longer match or who no longer have the will to buy at any price.

Sales deadlines: an unprecedented decline!

The sales deadlines, that is to say the time between the sale and the actual sale of the property, fell by 2 weeks nationally (14 days), falling below the 80 day mark, to 78 days. Buyers are aware that the real estate sector is escaping the crisis and making up their minds quickly. And it is once again in the regions that the trend is most marked, with a drop of 18 days compared to the first 9 months of 2020, and even 22 days compared to the same period in 2019, dropping to 81 days. : a situation never seen before! The projects, whatever they are (rental investment, semi-main or main residence, etc.), are there!

The time to sell is also accelerating in Île-de-France, dropping 13 days in 12 months, to 63 days. Paris preserves its reputation as a fluid market, but nevertheless marks time with a period of 75 days (-2 days) which varies little compared to last year when it was 59 days in 2019!

Negotiations that are relatively stable

Negotiation on the sale price has changed little compared to 2020. It is on average 4,5% (-0,10 point) nationally. However, the pressure remains strong on buyers, who have little time to position themselves and therefore to negotiate. In Paris, the difference between buying and selling prices stagnated at 2,90% (0 point vs. 2020). The same goes for Île-de-France (2,80%, i.e. -0,7 point), which however lost 1 point of negotiation capacity compared to 2019 (3,80%). In the regions, there too, the discussion remains equivalent to what it was at the same period last year, ie a difference of 4,70% (-0,40 point).

Conclusion

It is very likely that we are heading for another record year, after those of 2018, 2019 and 2020. The old real estate market is definitely the big winner in the post-Covid-19 era. The desire of part of the population to carry out their activity by teleworking several days a week is concretely reflected in the acquisitions of larger surfaces outside the large urban centers.

The inflation that is emerging, and which could be accompanied by a gradual rise in interest rates, nevertheless remains to be watched. Just like the increase in the costs of energy renovation work linked to the price of materials which is soaring and will perhaps be a brake on home ownership or rental in the months to come.

The new construction sector, struggling due to unavailability of materials, but also certain local decisions that limit the number of sites, leads investors to move towards the old, creating greater pressure on the costs. Finally, it remains to be seen whether the current craze of the French for semi-main and rural residences will be sustainable. Will neorurals find what they came to seek in the countryside or will they regret, after a first winter, their city life? See you in a few months to find out ...