Dealing with the pandemic required strict measures which restrained the economic activity. Tourism in France was put on standby, followed by a significant drop in this particular sector. However, various industries were differently impacted by the raging pandemic. Although the crisis put down many sectors on their knees, the French real estate market remained relatively stable.
According to the statistics, real estate sales didn’t undergo enormous changes. There was a significant drop from March to May as a result of the implemented restrictions. The subjects included in the purchase process were closed due to COVID-19, which paused property purchasing. However, the market gained its momentum quickly when the economic subjects proceeded with their work.
What are the current trends and predictions? In this post, we review the current situation, statistics, and predictions for the foreseeable future.
When it comes to prices, it is essential to note that they are subject to small adjustments. The mid-range real estate encountered minor changes, while the luxurious properties remained stable. In the early stages of the pandemic, the sales were put on hold. This action resulted from the strict restrictions, which allowed only essential workers to leave their homes. All of the notaire offices and real estate agencies were officially closed, making it impossible to complete purchases. Since the banks did not work, people couldn’t apply for a mortgage, further postponing the whole procedure.
However, this short pause was followed by a rise in investing. The restrictions were lifted in mid-May when buyers could finally complete the postponed purchases. The parties involved proceed with their business operations, so people could now apply for a mortgage at banks and use real estate agencies’ services. This means that the real estate market quickly regained its power resulting in the highest demand for real estate, according to a report by the Notaires de France.
Why did the real estate market remain relatively stable, even during a major economic crisis?
Experts have come up with various statements that support the current growing trend in the real estate market. The lockdowns made people think about switching from the city center to the suburbs to access outdoor space and get a larger property for the same money. Also, the lockdowns imposed working from home. Many people realized that they want to work remotely, so they want to move to rural areas while still keeping their job.
According to Notaires de France, one of the main reasons for the rising interest in property investing is safety. Buying physical assets is considered to be the most secure form of investing during a recession. Other investments such as stock shares are considered risky and are avoided due to the massive plunges.
Change in buyer’s preferences
While some preferred the sunny seaside or the green countryside, the remote working and lockdowns changed buyer’s requirements. They are now looking for houses with gardens and apartments with balconies. The property near Seine or parks has a massive demand, as Parisians want to have access to nature.
According to the current trends, the demand for property in Paris is decreasing. Paris is famous for the highest price per square footage and is now experiencing a steady pricing trend. While the average price per square foot totaled more than €11,000, you can now buy for €10,593. This is due to the rising trend of moving outside of city centers. As a result, prices for property in the surrounding areas will increase.
The COVID-19 restrictions stopped the economic activity, including the building sites. This resulted in a drop of new houses offered by 3.1%. Despite the number of new permits increased, the supply of new constructions will remain stable as the industry has returned to the initial state.
However, the new home offers are expected to rise as a result of the PINEL law. Private investors will have certain benefits, such as lower tax rates. The French government introduced this measure to revive the construction industry, resulting in success. Another action that will stimulate the growth of this sector is capital gains tax relief. This will motivate people to sell their property or land for construction, boosting the growing industry and securing more newly built homes.
Although the pandemic had a colossal impact on the economy, the property market remained relatively stable. The only thing that will change is buyer’s preferences, as they are now seeking a property with outdoor space such as gardens or balconies.
Knowing the current real estate market trends, buying a property in France is a stable and secure investment. Besides, selling is a good option as the prices didn’t undergo a dramatic plunge. As a professional real estate agency, we will guide you through the whole process. Feel free to check our website and contact us if you need assistance selling your home in the Landes or Pays Basque!