Humanity will not be the same after the challenges that had to be overcome in the bygone year of 2020. Strict quarantine restrictions related to the spread of coronavirus infection, as a consequence - a downturn in the economy. All this had a very mixed effect on the global real estate market.
Events in 2020 on the real estate market in France
Pessimistic forecasts of experts were not confirmed everywhere. Some states at the end of 2020 showed not only stability but also an increase in prices for square meters. Among such countries is France with a real estate value growth rate of 6.5%. Paradoxically, the reason for this was the pandemic, as well as the tightening of the rules for granting mortgages.
The latter factor "took out of the game" potential buyers of inexpensive objects in the secondary market. The real demand was made up of solvent subjects, most often interested in the acquisition of elite real estate. New buildings became more in demand. And since the construction was partially suspended for known reasons, there was a shortage of supply. As a consequence, prices increased.
During the first lockdown, in the spring of 2020, significantly reduced the number of transactions in the real estate market in France. But an undoubted plus for him was the "freezing" of prices at the pre-crisis level. The lifting of restrictions provoked an incredible jump in sales in the second half of the year.
Contrary to expectations, the value of real estate continued to grow in both metropolitan areas and small towns. In some places, this figure reached 16%.
The average price per square meter of French real estate in 2020 was from 2770 to 2811 euros. The rise in prices, according to experts, led to a reduction in the purchased area in many major cities (Lyon, Marseille, Strasbourg, Dijon, Paris, etc.).
How the market will develop in 2021, is difficult to say ...
Some analysts predict a fall in French real estate prices in the second quarter of 2021, as they have almost reached a historical maximum and made housing unaffordable for most citizens of the country. The ratio of the cost of square meters to personal income makes loans at the lowest rates too expensive for many households. However, French real estate is still in demand among foreign investors. Particularly popular are objects in the resorts of the Côte d'Azur and the metropolitan area. Therefore, there are no obvious preconditions for the forecasts to come true.
In 2021, the problem of insufficient housing supply will be more acute than ever. It is predicted that the government's support program will be curtailed, and the conditions for granting mortgage loans will be relaxed. In the current environment and rising unemployment, the latter news is unlikely to increase the purchasing power of the population within the state. Therefore, the evolution of the market with many unknown factors is still difficult to assess.
GARANT.IN estate keeps its hand on the pulse of all events in the global real estate market. The difficult economic situation and quarantine restrictions have made many adjustments to the usual way of life and contractual relations. To help our clients achieve their goals, we employ experienced lawyers and professionals.
