The rise in housing prices eases with the crisis, but not everyone benefits

"The rise in prices continues (...) but it is easing", summed up the notary Elodie Frémont on Thursday, on the occasion of the presentation of quarterly figures for the old housing market.

This comes out of several years of uninterrupted price increases, with as a symbol the case of Paris where the square meter passed the symbolic threshold of 10.000 euros last year.

Since then, a major economic crisis has set in with the coronavirus epidemic, and a massive recession is on the program this year in France.

The effects, however, are long overdue on the housing market.

Most notable: Sales have plummeted following the strict containment put in place in the spring. At the end of September, there had been less than a million in a year, a first since the end of 2019 and the slowdown will surely be accentuated by the new confinement introduced in November.

But the real issue is whether housing will end up costing less. And, in this regard, the movement is still timid.

In the third quarter, roughly the summer of 2020, they further increased by 5,2% compared to a year earlier, according to INSEE. This remains a slowdown, compared to the previous quarter (+ 5,6%).

Above all, this phenomenon affects the province such as the Île-de-France, even if this opposition is simplistic and does not take into account the differences between the countryside, small towns and large metropolises like Lyon and Marseille.

"The 11.000 euros per square meter in Paris will not be reached at the end of the year and certainly not in January," admitted Ms. Frémont.

Rent cap

The fact remains that there is a long way to go between slowing the surge in prices and a real drop. This is not impossible but it will certainly wait for many months to materialize.

French house prices could fall by 2% next year, estimates the rating agency Moody's.

She notes that real estate generally follows economic growth closely. However, with a decline of around 10% in gross domestic product (GDP) expected this year, prices will fall.

A priori, this is good news. While it is easier for the French to find accommodation, this in turn helps boost the economy, for example by making it easier to live near work.

However, according to Moody's, the fall in prices will not mean that housing will become more affordable overall. Because not everyone will benefit as much.

"This is the first time that a crisis affects people in such a differentiated way," said Vincent Allilaire, one of the agency's experts, at a conference earlier this week.

"The sectors (...) most affected are those which employ the lowest-income and youngest employees," he notes, arguing that these categories may have difficulty borrowing money. to buy housing.

This selection is already evident in the figures on mortgage loans. It is all the more marked as the financial authorities have been asking banks for a year to lend on slightly less favorable terms.

As housing will become less and less financially accessible, Moody's is predicting yet another development, this time political.

"There will be more and more regulations with a social purpose," said Mr. Allilaire, the most emblematic being the ceiling on rents.

In fact, several large cities, including Lyon and Bordeaux, have applied in recent weeks to the government to launch such a measure, thus joining Paris which reinstated it last year.