Real estate: the market is resisting the crisis … for the moment

Despite lockdowns and persistent threats of a prolongation of the Covid-19 epidemic, the dreaded collapse has not happened for residential real estate. Sales of second-hand homes fell only 2.7% in France over one year, posting 980,000 transactions on an annual basis. On average, real estate prices increased by 2.1% nationally in 2020. Caution is needed however for the start of 2021.

The health crisis is prolonged, with a more restrictive curfew and a persistent risk of re-containment in the event of worsening of the epidemic monitoring indicators. The residential market remains dependent on this environment.

Transactions remain strong

Sales have not fallen, contrary to what one might fear at the end of a year deprived of nearly four months of activity due to confinement on two occasions. The level of 980,000 transactions over twelve rolling months at the end of December 2020 is comparable to that of previous years. It is down only 2.7% from the record level of nearly 1.1 million transactions reached in 2019.

In some agency networks, the annual decline in sales is certainly more noticeable, around 12.1% at Century 21, 8.2% in the Era network or according to aggregate data from Fnaim, or 6 % at Laforêt. “We are far from the arithmetic fall of 25% that one would have imagined following the total and then partial stoppage of activity, linked to the two confinements”, notes Laurent Vimont, president of Century 21.

Gradual price stabilization

On a national average, real estate prices increased by 2.1% in France in 2020 according to the Meillleurs Agents observatory, with strong geographic disparities between large cities and intermediate areas.

“The March containment marked an inflection in the price curve, particularly visible in Paris and in the ten largest cities in France. Since September, the real estate market has entered a new phase of decline, the extent of which is still unknown, ”said Thomas Lefebvre, Scientific Director of Meilleur Agents.

Despite two lockdowns and disruptive health restrictions, the real estate market has therefore shown a certain resilience with an astonishing rebound during last summer, marked by a revival of sales and the maintenance of prices at a high level. But it is starting to send mixed signals.

In the branches of very large cities and in particular in the capital, the stock of goods for sale first increased, while the number of potential buyers became scarce, then it tends to decrease because potential sellers withdraw their property from the sale.

Contrasting situation

In Paris, the recent fall in prices, still very moderate, affects all the districts. Buyers, fewer in number, ready to delay their projects in the hope of lower prices, see the market evolving in their favor.

In the capital, the average price was around 10,600 euros at the end of last year, an increase of more than 5% over one year. But this annual growth masks the decline that began in the last months of the year. Same observation in Lyon, Marseille, or Toulouse, affected by the aeronautics crisis.

At the same time, interest in certain provincial towns, such as Nantes, Rennes or Bordeaux, continued. Very occasionally, purchases of residences in rural areas, which had hitherto been neglected, have also been made by households looking for a change in lifestyle after the experience of confinement. But the recession should limit these developments.

The overheating of prices, feared in early 2020, just before the health crisis, was in any case clearly avoided! Faced with buyers in a waiting position, sellers could be tempted to withdraw their property from the market, unless it is imperative to transfer.

Lack of confidence

Buying a home represents many years of net income. With rising unemployment, households’ fears about their future income and a slowdown in the granting of loans, the number of real estate transactions could fall automatically, which generally favors a fall in prices.

For the moment, this has not really happened in the second half of 2020, but the effect could be delayed due to the numerous measures of support from the State to the economy and to households.

A momentary decline of 5% to 10% to come in 2021 thus remains possible, with strong geographic disparities. Confidence, one of the engines of real estate acquisition, will indeed fail with the economic recession. The sector cannot escape a crisis that is slowing the economy.

This prospect will probably not be able to be offset by the post-containment aspiration of households to an installation far from large cities, with more space and less transport. This expression of interest has triggered purchasing acts, but not in a massive way, and it only concerns workers who can telecommute and hope to keep their jobs.

Safe investment

However, the stone remains a safe haven, while retaining its role of transferring savings to prepare for retirement.

Its lower liquidity mitigates the immediate impact on prices. And the investment in the stone has fleshed out its strengths with the health crisis. Its protective dimension – in the sense of comfortable housing that provides physical protection, in particular against the virus – has been reinforced.

Interest rate support

The very low level of mortgage rates is undeniable support. The Housing Credit Observatory assesses them on average at 1.2% excluding insurance.

“Rates are down overall, including for profiles that were less sought after in recent months. In addition, the constraints weighing on banks were slightly relaxed at the end of December, and they gained a little leeway to grant mortgage loans.», Indicates Maël Bernier, communication director of the credit broker Meilleurtaux.

But despite recent injunctions from the Ministry of the Economy, inviting banks to further ease the granting of credit, financial institutions could remain on their line for the past few months and be more careful about the less secure files.


Unemployment resulting from the economic recession, caused by the health crisis, remains a major threat, which can limit the solvency of households and make acquisition candidates, such as lending institutions, more cautious.

The forecast for a slight drop in prices in the last quarter of 2020 seemed relevant, especially with the prospect of a third wave and a possible re-containment. The reality has not been so clear-cut according to the feedback from the networks of real estate agencies or observatories of the profession. However, we will have to wait for the aggregated data of notaries in three months to confirm this finding.

The year 2021 therefore seems very uncertain. Even if the Meilleur Agents observatory believes in a year of stabilization. Because the increase in real estate prices is calming down everywhere, and the trend is reversed in the largest cities.

We can therefore expect a moderate drop in prices, the extent of which remains to be defined. Better to plan on the second quarter for a possible acquisition project, the time to have a little visibility on the evolution of the health crisis.

A horizon necessary to assess the consequences of the economic situation on his personal and professional situation. Only the control of the pandemic thanks to a wide distribution of the vaccination against the Covid-19 will allow a real resumption of the activity, based on a return to normal of the economic life, likely to bring perspectives and visibility. to households.

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