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Mer et Demeures: sea view and waterfront real estate for sale and for seasonal rentals on meretdemeures.com.
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New housing in France, a market in recovery?
After a significant drop in the commercial offer and the number of sales, will the new housing market take off again in 2022?
2020, new housing in free fall
In 2019, the FPI* noted 166,299 sales of new homes, that is 2.7% fewer sales than in 2018 (167 101 sales recorded). According to the FPI, this market contraction can be explained by the drop in the number of building permits issued, the length of time it takes to complete projects, the government's policy of focusing on renovation, etc. As a result of market forces, with demand outstripping supply, prices have risen (+4.6% in 2019 compared with 2018).
In 2020 the fall in the new building market accelerated. To the factors previously mentioned, the sanitary crisis was added (stop of the building sites, confinements, lack of raw materials...).
The result is striking: -23.3% of total new homes sales between 2019 and 2020 with 128 031 new homes sold. Only the bulk sale of new housing is coming out of the water and recording an increase of 7.2% over one year. It represents 29% of the volume of new housing sales. As for prices, they have increased by 0.5% during the same period.
Bulk sale: Purchase of a new housing development in whole or in part by a single buyer (social landlords, institutional investors, etc.). The buyer can then resell each unit separately or rent them out.
2021, a ray of hope
As of the 1Q 2021, the trend is upward with +12.8% of new housing sales compared to Q1 2020 (including +57.1% of bulk sales and +6.9% of sales to private).
The second quarter seems to confirm this market recovery. The FPI notes a 27.2% increase in new constructions sales between Q2 2020 and Q2 2021. The number of building permits filed increased by 67.2% and the number of housing starts was up 32.7% from Q2 2020.
Also in Q2 2021, bulk sales, which represent 18% of total sales, are down 30.3% compared to Q2 2020. They were offset by sales to private individuals, which jumped by 56.2%. This is a sign that the new home market is still attractive to individual buyers.
However, this market recovery remains to be put into perspective, as 2020, marked by the health crisis, is historically low. This is evidenced by the volume of new home sales, which is down 14.1% compared to Q2 2019.
Between the first and the second quarters of 2021, the number of homes listed for sale increased from 23 039 to 27 532 and the number of sales increased from 34 954 to 35 448. If the recovery continues by the end of 2021, there is good reason to expect the increase to be steady and carry over into 2022.