- Due to the confinement, the real estate market is on pause and new transactions are extremely rare.
- Different scenarios for emerging from the crisis emerge but depend on random factors such as the duration of the confinement or the extent of the economic crisis.
- Experts in the sector are planning a correction in prices in Paris but doubt that they will drop sharply due to the attractiveness of the capital.
“Today, on the real estate market, we pressed pause, analysis, incredulous, Laurent Vimont, president of Century 21 France. This is something that we had never known, it is new. Like French society, real estate, particularly in Paris, is not immune to confinement and its repercussions. Obviously the visits are no longer made so the sales are stopped. Since the beginning of the state of health emergency, "new files, I had two, which are sales between neighbors in the same building, to tell you that it is anecdotal", notes Me Delesalle, door - word of the Paris notaries' chamber.
However, if the real estate market is on a break, it is not yet in crisis. "The real estate is not worse than the rest, there is no structural problem with real estate, judge Eric Allouche, executive director of the ERA France network. Housing is not comfort, it is a pressing necessity, so there will always be a need for real estate. But everything will depend on the duration of the confinement and the crisis. "The French social mattress is quite exceptional and will allow to keep incomes, purchasing power, estimates Laurent Vimont. If it lasts two months, it should be fine but if it lasts six months, it will be complicated. "
Increase in estates
Indeed, who says long and hard crisis, says unemployment, says falling income and ultimately property acquisitions. But, "we are not in this case, we will remain in a situation of delay in acquisition but which will intervene all the same because the needs remain, judge Eric Allouche. I don't see why real estate is going to crash. "The market has stopped, will it resume?" wonders Me Delesalle. Logically yes, but necessarily less strong. "
The notary sees several factors that could affect the volumes. Fearing a possible drop in price, the seller prefers to withdraw his property while waiting for better days. "This is what happened after the 2008 crisis," he recalls. It can balance the market, because there would be fewer sellers and buyers. "Mortality of the coronavirus obliges, Me Delesalle anticipates an increase in sales coming from successions while according to him," there will be more divorces because of confinement, so that leads to sales ". However, these assumptions also have their downside: "Divorces also cause purchases as well as inheritance, because people inherit and suddenly buy back, but it is not in the same timing". A sacred imbroglio which therefore prevents us from projecting ourselves with certainty.
In the decision to buy, the question of rates occupies an important place. And these, which have increased slightly in recent months, should remain low. "This is what we all expect," said Ms. Delesalle. "We will need, at the end of this crisis, rates that will be attractive because we will need to revive the economy, I can hardly see an economy that would raise rates", abounds Eric Allouche.
Containment and its psychological impact
Another factor that could play on the market is the famous "safe haven stone". “When you are on shifting ground, you look for points of attachment, comments nicely the executive director of Era. In these times, there is something irrational and the only thing that is really rational is real estate. "It is obvious that with the broths that investors have taken in the stock market, there will be a reflex to go on real estate, adds the notary. But when we see the crisis of 2008 where there was this reflex, it took a long time because investors wait for the stock market to go up a bit before transferring their savings. This had been the case in Paris in 2011 and 2012, where there was an enormous amount of refuge stone, and prices increased for two years by 20% per year. "
Our file on the coronavirus
Finally, the psychological aspect of confinement will also have an impact on the real estate market, advance our three specialists. "There are people who will take advantage of this time to think about what they want for housing," says Laurent Vimont. People confined two months in an apartment will say "now we want a house", so that may change a lot of things. "
"Maybe people will want little birds, space, fresh air, and that is quite possible, depending on the duration of this crisis," says Eric Allouche. "The psychological element is important, impossible to tell you how much it will influence the market, but I think it will be very, very important," said Me Delesalle.
The Benefits of Telework
However, confinement often rhymes with telework and distance (roughly). "Maybe some people will get a taste for teleworking and maybe they'll say to themselves by looking at real estate prices" isn't it worth going a little further? " Asks Eric Lellouche. And the exodus of Ile-de-France residents to the provinces can also give ideas. "When you see real estate in Paris and elsewhere and when you have tasted a slightly more secluded place, you can get a taste for it and ask yourself the question," he said. The notary envisages in Ile-de-France a possible "revival of green real estate [rural areas, country houses]. There can be this current because of what we are experiencing at the moment, of our reflection on life. "
Uncertainty is paramount on the question of price developments. "I am one of those who consider that the question of prices must be said" I don't know, "says Laurent Vimont. We are still in a very tight market, where there are more people who want to buy than people who want to sell, so the subject of prices is premature. However, the specificity of the Paris market where supply is overwhelmed by demand makes a price drop unlikely. "I absolutely don't believe it," says Eric Lellouche, "simply because the demand is there." Prices continue to rise, it is often much more than 10,000 euros per meter, as soon as there is a little cachet. "
"I think there will be a price correction, a drop," said Delesalle. But I don't think we should expect a drop to 20%. There are so many buyers on the market. Today, if you have a property for sale, you have 6-7 buyers opposite. If you have 3-4, it will be a little different but from there to that there is a market reversal and that there is for a good to sell a half buyer ... "
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