After a dynamic start to the real estate market at the start of 2020 in Paris and Ile-de-France, the Covid-19 health crisis has caused an unprecedented shock. The consequences are still largely unpredictable. The following market analysis is derived from the Notaires de France report. It presents the real estate situation in Paris: the trend and evolution of property prices after confinement.
Following the health emergency, there was an almost instantaneous halt in real estate transactions. For the first time, the real estate sector suddenly paused, whereas before the crisis it was unquestionably booming, posting double-digit growth in late 2019 and early 2020.
In the old sector, the volume of transactions increased by 11% in 2019 and posted the same growth rate on January 31, 2020, i.e. 1,076,000 sales at sharply rising prices, both in Greater Paris and in the provinces. In the 4th quarter of 2019, the increase was even stronger: +1.3% compared to the 3rd quarter of 2019, then +1% in the 3rd quarter and +0.7% in the 2nd quarter.
Over one year, the rise in prices was felt: +3.7%, then +3.2% and +3.1%. As observed since the end of 2016, it was higher in apartments (+5.2%) than in houses (+2.6%). An analysis of pre-contracts confirmed this trend.
Yes, but… The large-scale containment measures obviously had immediate consequences on the real estate market, particularly in terms of transactions.
The prospects for recovery are hypothetical and depend on the outcome of the only fight that is currently the priority, namely the fight against the coronavirus.
The end of the containment measures set in motion a catch-up mechanism in the first weeks. This is to regularize all sales affected by this cyclical shift (mainly in the second quarter), which were frozen following the lockdown.
This assumption remains subject to a simultaneous resumption of activities by all stakeholders in the real estate chain. Moves must, in particular, be authorized to relaunch this mechanism. This is the perfect opportunity to find a property hunter in Paris, to boost your search and your future move. They are the key to moving forward quickly in the realization of your real estate project.
Will this market recovery mark the end of the crisis? This is not everyone's opinion: this mechanical postponement effect will not dissipate the inevitable and sudden consequences of the almost total shutdown of the real estate sector for long weeks. The current collapse and the difficulties in regulating sales raised by the health crisis will naturally recur in the two or three months following deconfinement, given the inertia and deadlines imposed on the market.
This situation will likely be aggravated by the fact that this current period is usually busy, for seasonal reasons. The coming summer will mark a downward trend in transaction volumes a priori.
How will the parameters specific to the real estate market – so far quite engaging – be affected and how will they resist, in the face of a global economic environment very seriously affected by a planetary virus for which no vaccine has yet been found? this day ? Although a severe economic recession can be expected, the market may start to recover towards the end of 2020 or the beginning of 2021, although not with the same vigor as in 2019.
The property inspires confidence in a primarily user-oriented market and meets a real need. This need may paradoxically be exacerbated by the current situation: in these exceptional times, owning a home has never been so important. For more information on the real estate market after confinement, click here< /a>
Photo source: XPS / unsplash
Parisearch is a real estate agency in Paris.
Connected 24 hours a day to the market and its network, it responds to all requests for research or sales of real estate in Paris and the Ile-de-France.
Its objective is to accompany its customers in the realization of their project of life by securing their step and by allowing them to reach rare goods (off-market) which will make their happiness and will answer perfectly their criteria.