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 required for the start of 2021, however. The health crisis is prolonged, with a more restrictive curfew and a persistent risk of 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% compared to the record level of almost 1.1 million transactions reached in 2019.

Prices jump in metropolises.

On the other hand, the phenomenon fully benefits regional metropolises, such as Rennes, Nîmes, Nantes and Montpellier, which have seen their prices jump. Despite everything, professionals in the sector continue to believe in a gradual questioning of hyper-urban concentration. For 2021, they expect prices to stabilize, except in Paris and the ten largest French cities for which they anticipate a slight drop.

Rather optimistic forecasts.

For the year 2021, forecasts are still uncertain. However, the sector will not be spared by the economic crisis. Moreover, since September, the real estate market has initiated a decline, the extent of which remains unknown.

Analysts are nevertheless optimistic. Household confidence and low real estate rates give no reason to fear any collapse. Especially since the ECB has announced the extension of its current borrowing rate policy until 2022. In addition, the new recommendations of the High Council for Financial Stability should revive the demand for mortgage loans. The regulator has in fact raised the maximum authorized debt ratio to 35% instead of 33% previously. Everything therefore suggests that the purchase conditions will remain advantageous in 2021.