January 18, 2022

Transactions soar, stocks are running out: old real estate is overheating

It’s a surprise to no one: sales of second-hand homes exploded in 2021. Between January 1 and October 31, 1.198 million apartments and houses were sold, 14.5% more than on the previous year. same period in 2019; 2020 is not considered as a reference year due to the health crisis.

“There was both a catching-up phenomenon with the increase in transactions at the end of confinement and a phenomenon of acceleration of decision-making which explains this record volume”, declared, this Monday, December 13, Frédéric Violeau, notary in charge of national real estate statistics at the Superior Council of Notaries (CSN).

« 2021 has been an exceptional year despite lockdowns and six months of curfew. The French adore stone, it is their cherished investment ”, already noted, on November 23, his colleague Thierry Delesalle, president of the statistics commission of the Notaries of Greater Paris.

The prices of apartments and old houses increased in 2021

In reality, the demand is such that the prices of apartments and old houses have increased by 5.2% and 9% respectively. Inflation is felt more in the provinces – + 7.5% and + 9.4% – than in Île-de-France – + 2.5% and + 7% -. “All the curves are up with a few exceptions”, hammer master Frédéric Violeau for the Superior Council of Notaries.

At the same time, the ratios between the most expensive city / agglomeration – Paris in both cases – and the least expensive city / agglomeration are relatively stable: 2.5 for apartments and 2.8 for old houses. The strong attractiveness of the Atlantic coast thus reduces the gap between the capital and Nantes to 2.8 in 2021 against 3.1 in 2011.

For the same purchasing power, the number of square meters decreases

Where the shoe pinches is purchasing power. The rise in prices is such that it is not offset by the low interest rates. Result: at purchasing power equal to that of 2020, the areas purchased are lower in 2021. Starting from a credit base of 800 euros per month for 20 years with an interest rate of 1.13% in 2021, the Superior Council of Notaries (CSN) estimates, for example, that it is possible to buy an apartment of 50 square meters (or a 42 m² in Nantes). This is 4 m² less than in 2020 with an interest rate of 1.30%.

For old houses, this time based on a credit base of 1,300 euros per month, the CSN considers that it is possible to acquire a property of 140 m² in 20 years, and 168 m² in 25 years. This is 8 m² less than last year with the same interest rate at 1.30%.

No urban exodus according to the Superior Council of Notaries

In this flood of communicated data, the departments bordering the administrative and geographical borders of Île-de-France are doing well, with + 4 points compared to 2020 (+ 9 in Orne), but “This is not an urban exodus”, immediately tempers Frédéric Violeau, notary in charge of national real estate statistics at the Superior Council of Notaries (CSN).

“This is an additional real estate behavior, a desire, for some Ile-de-France residents and residents of large urban centers, to afford more greenery. Quality of life has become the essential parameter ”, decrypts Master Violeau.

“The houses and the inner suburbs were already very dynamic before the Covid-19. There is now a very clear desire to move, to change your life ”, had, too, noticed Cédric Blanchet, president of the Chamber of notaries of Paris.

Stock depletion and new construction that does not pick up again

His colleague Thierry Delesalle, author of the theory of “7D” for “deleveraging”, “death”, “divorce”, “move”, “demography”, “tax exemption” and “donation”, which trigger a transaction, he pointed out. , from November 23, stocks are exhausted. “We will have to reconstruct or build them, but construction is not starting again”, he regretted with regard to the number of new housing started.

« If goods recovered in succession and kept by affection gradually arouse disinterest before being sold, this can compensate for the lack of stock, but the French are always encouraged to buy with such low interest rates, we can therefore fear an overheating of prices ”, still pointed out Maître Delesalle.

“The end of the year 2021 should be part of a still upward trend with volumes well above one million transactions », confirms, on December 13, the Superior Council of Notaries.

Still, new construction is not picking up as quickly as hoped by real estate developers. According to official statistics, 468,000 housing units were certainly started between November 2020 and October 2021, but this will not be enough to catch up with the 381,600 building permits purged of all appeals in 2020, and very meager compared to the years 2019 (410,000 ), 2018 (414,100) and the record of 2017 (497,000 housing units).

Especially since according to the same government sources, there are still nearly 1.1 million vacant homes. So many apartments and houses that escape the market and that could accommodate all French people.

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