While the very good results for the second half of 2020 gave hope for a calmer year in 2021, no one was expecting such a volume of transactions, which marks another record year!
The real estate market appears to have been preserved from the crisis, in a context of economic recovery. Unemployment and interest rates, both at their lowest, undeniably contribute to this dynamic, as does the organization of companies, with the increase in teleworking. Housing returns to the center of the concerns of the French. The notion of semi-secondary residence, resulting from the confinements, was further accentuated in 2021, particularly in medium-sized and rural towns, which attract French people with strong real estate purchasing power. In the regions, the houses, taken by storm, pull the market upwards, while the supply continues to dry up throughout the territory.
Growing demand for housing
Demand continues to accelerate to reach + 18% nationally compared to 2020, a year which was certainly marred by confinements, but already extremely dynamic. Investors remain very active, representing a quarter of purchase intentions. Real estate retains its status as a safe haven thanks, in particular, to interest rates that are stabilizing around 1%. And it is the houses that benefit the most from this interest, with + 19% recorded on this type of property in 2021 against “only” + 9% for apartments.
In Paris, demand was clearly revived in 2021 (+18%), after a sluggish 2020. However, we remain below the usual level. A situation linked, in part, to the absence of international customers but also to the questions of investors faced with many subjects: rent management, impacts of the Climate and Resilience law... With a 14% increase in demand , Île-de-France confirms, once again this year, its role as a transfer market for Parisians looking for space. These are mainly owners who have sold their property and taking advantage of the added value to find a house with a garden or an apartment with an exterior while still wanting to stay in the same living area.
In the regions, medium-sized cities are clearly the big winners of this year 2021 in terms of demand (+ 19%). The inhabitants of large agglomerations have had a bad experience of successive confinements and aspire to more space and quality of life.
A breathtaking offer
After 4 historic years in terms of transaction volumes, which have helped to dry up stocks across the country, supply is down another 15% compared to 2020. While all types of goods are affected by this shortage, houses are the most affected, with a 16% decrease in sales (compared to -4% for apartments). Paris is an exception, however, with a market that relaxed throughout the year, leading to a supply that was reconstituted to the tune of 24%. Remember, however, that this increase represents in reality only 2 additional properties in the portfolio of a real estate agency. In Île-de-France, two trends are colliding, with on the one hand a stock of apartments which is gradually being rebuilt, and on the other a supply of houses which is falling sharply, leading to a fair balance, i.e. -1 % change in the level of supply compared to 2020. It is in the regions that the fall in sales is the most spectacular (-23%), after a year 2020 already marked by a sharp decline. Stocks have never been so low.
Overall, this reduction in the supply of goods is at the crossroads of several trends. Upstream, a struggling new-build market, with the shutdown of many construction sites in 2020 and, today, difficulties in the supply of materials. Then, the owners of a home with space and an exterior have sometimes given up selling to keep these privileges today envied by many French people.
Another record year for transactions
+ 20% compared to a year 2020 affected by confinements and the health crisis, this is the record growth in the volume of transactions observed in 2021 within the Laforêt network. An increase that even stands at + 3,6% compared to 2019, yet the best year of all time in old real estate. The French take full advantage of very low borrowing rates to acquire more spacious accommodation, make a rental investment or buy a second home.
Paris is back to positive activity (+27%), even if the capital is down from its pre-crisis level (-8% vs 2019). Transactions in Île-de-France progressed in the same proportions as the national market (+20%), hampered by the reduction in inventory. Finally, the volume of transactions in the regions stood at +21%, although we perceive a slight slowdown in this dynamic in the last quarter of 2021 compared to the second half of 2020, accentuated by the post- confinement.
In the regions, city dwellers looking for space and greenery are driving up prices!
In 2021, prices remain on the rise (+6,1% nationally, to €3/m394) except in the capital which recorded a slight decline (-2%), but remains at the level before - crisis at €1,4/m10. And it is again on houses that the increase is the most significant: + 376% against + 2% for apartments. Despite a slight decline this summer, prices therefore remain on an upward trend due to a scarcity effect and ever-increasing demand.
In the regions, this growth even reached +8,2% (to €2/m430). In some cities, prices are soaring, such as in La Rochelle (+ 2% on the price per m9), but also in cities located near Île-de-France, such as Orléans (+ 2%). Brittany and Normandy have also been very popular for 7 months, recording significant price increases in old real estate, such as in Le Havre (+ 18%) and Brest (+ 8%). In large cities, such as Bordeaux and Lyon, the increase remains contained below the 9% mark. Only Marseille is an exception: the Marseille city has seen the price of its m² increase by 2% in 7.
Sales made in less than 3 months, everywhere in France
Reflecting the very strong momentum of the market, national sales times fell below 80 days (79 exactly), i.e. 2 weeks less than in 2020. Everything is sold, and quickly, including in the regions (83 days). By way of comparison, it took 97 days on average in 2019 to sign a transaction outside of Paris or Île-de-France. Buyers decide quickly and it is no longer uncommon to see several simultaneous purchase offers for the same home.
In Paris, sales times stabilized at 77 days. However, it should be remembered that they were only 59 days in 2019. Finally, Île-de-France is taking full advantage of the postponement of Parisians on its territory, with sales times which are accelerating significantly (67 days ), i.e. 11 days less than in 2019. Figures which once again reflect the attractiveness of this region which concentrates many advantages: economic basin, transport infrastructure, educational and cultural centers of reference.
Trading margins hold
Nationally, the difference between the sale price and the purchase price amounts to 4,5% in 2021 (compared to 4,4% in 2020). We are entering a phase of normalization of the negotiation. Within the Laforêt network, the pressure was felt more strongly during the first half of the year with even lower price differentials, particularly for houses. In Paris, this spread stands at 2,90% compared to 3,10% in 2020. The market has picked up and the moderate drop in prices has encouraged Parisians to be more measured in their negotiations. In Île-de-France, with a difference of 3%, buyers are negotiating less than in 2020 (3,7%). Finally, in the regions, the negotiation is reduced significantly compared to what it was in 2020, i.e. 4,70% against 5,60% last year.
Outlook for the old real estate market in 2022: between threats and opportunities
The future is taking shape today between threats and opportunities. A few months before the deadline, the presidential elections do not seem to worry our fellow citizens. On the other hand, inflation in the cost of living in general, and of energy in particular, is a matter of concern. Especially since the rise in interest rates could be considered as a solution to curb this inflationary trend, even if the European Central Bank wants to be reassuring. Such a scenario would have a direct impact on the number of households eligible for purchase and on the financing envelopes allocated by the banks. On the other hand, it would serve the prices of goods, which could land, or even regress, allowing new buyers to come or return to the market.
Another threat identified is that posed by the Climate and Resilience law to the existing building stock. Investors could indeed rethink their projects, anticipating the high costs generated by the obligation to renovate energy-intensive housing for rental purposes. The probable increase in the property tax or the housing surcharge on second homes could also impact the real estate decisions of the French. The absence of a vision for the planning and development of territories remains a subject of concern for 2022: a debate so far completely absent from the presidential campaign. Finally, the banks, which until now only had recommendations to follow in terms of the conditions for granting loans, will tomorrow have the obligation not to exceed 35% of indebtedness and 25 years of loan duration. , which will not be without consequences for investors and the most modest households.
Faced with these constraints, 2022 nevertheless reveals real opportunities. Teleworking, which is organized in many companies, encourages residential mobility and allows many French people to move away from metropolitan areas to access larger housing and another quality of life. In addition, the limited supply of new real estate, struggling for several years and strongly impacted by the stoppage of construction sites in 2020, as well as by the difficulties in supplying raw materials and by the surge in their prices, is pushing buyers to the existing stock.
The economic growth that we are experiencing, a guarantee of confidence, with France which is in the front rank of European countries in terms of recovery, should stimulate the purchase or investment of real estate. The market should therefore continue at a sustained pace in 2022, with the scarcity of supply still weighing on prices.