More than one million real estate transactions. The symbolic threshold was crossed in 2019, according to Century 21 in a report dated January 6, 2020, due to the “exceptionally high” level of sales in the past year and particularly favorable conditions for acquisitions. Interest rates on loans have dropped significantly, leading to a “boom” in the duration of loans granted – averaging twenty-one years.
However, this unprecedented figure should be interpreted with caution. At the national level, the increase is “moderate,” says Laurent Vimont, president of the French subsidiary of the group. “The market is extremely smart and fluid.” Except in major cities, where prices continue to rise: In Paris, the price per square meter has more than doubled in fifteen years, and sales volumes fell by 7.5% in 2019.
See also : Is investing in real estate still profitable?
The most striking fact across the country is the explosion of rental investments, that is to say, the purchase of a house in Rennes in Brittany, for example, to rent it out to third parties. More than one in four transactions has been made in this regard, representing an increase of nearly 25% in one year. Moreover, employees and workers are an integral part of the movement: they account for more than a quarter of these investments, which constitutes “the largest socio-professional category among investors,” as the report highlights.
“Real estate is becoming a real gold mine,” comments Laurent Vimont. Workers and employees have understood the advantages of borrowing at low interest rates. “The average purchase is only about €130,000, compared to over €200,000 when all types of purchases are taken into account.” At a time when households have no vision of the future, investing in property is unparalleled,” asserts the real estate specialist.
Related reading : Where is the temperature probe?
In the capital, rental investments account for 31% of transactions, an unprecedented increase of +45% in two years. The French, as retired homeowners, will see a reassuring element,” the Higher Council of Notaries reportedly stated. “This allows for a sort of capitalized retirement.”
Paris, a “centrifuge”…
But the differences are still significant, with a spectacular rise in prices in Paris, where the average transaction amount is €487,749. This is almost twice as much as in 2005, but the space has hardly changed: “Parisians are forced to give up a few square meters to be able to buy,” explains Century 21 in the study. Regarding the demographic groups involved in the purchase, it is mainly executives – with 47.9% – compared to only 4.9% of employees and workers.
The three departments of the Île-de-France region bordering the capital are also characterized by an unprecedented rise in prices. “Paris remains a centrifuge around which the market revolves,” summarizes Laurent Vimont. Prices are rising sharply in city centers, in Hauts-de-Seine for example by nearly 10%. It is no coincidence that gentrification, manifested by the increasing arrival of executives, stimulates demand.
A future adjustment of prices
At the national level, there are no price peaks in Century 21. But two elements could affect the market, announces Laurent Vimont: “Some sellers are beginning to overestimate the price of their homes, and banks are being more cautious in granting loans.” The report highlights that these are likely to decrease in the coming months. This will lead to a market price adjustment.
“The volume of transactions is expected to remain at the same level,” indicates Thomas Lefebvre, scientific director of the real estate valuation site Meilleurs Agents. A forecast that the Higher Council of Notaries agrees with: “Given the current policy of the ECB, a sharp increase in the key rate, which would then take the form of loans, is hardly conceivable,” assures a spokesperson. For the president of Century 21 France, 2020 will remain a “spectacular” year. His “forecast”: a moderate price increase of about 2%.