Six French real estate trends based on notarial data

Notary of France released final real estate figures for 2021, following a record year for the market in terms of sales.

It came on the heels of a stunted 2020, when sales slumped due to the coronavirus pandemic. This created pent-up demand and also saw many projects pushed back, adding to the high number of sales last year.

The total number of sales over a 12-month period peaked in August 2021, with 1,212,000 transactions – this only includes ‘non-new properties’, i.e. those over two years old.

By January, that figure had fallen to 1,177,000 (in the previous 12 months).

the notariesThe report also shows that the median price of non-new properties across the country rose 7.2% over the year. The rise was strongest for houses, with the median price rising 9.1%, compared to 4.6% for apartments.

This data is the most comprehensive available as it takes into account all real estate sales and pre-sales that take place in France rather than data from individual real estate agents.

It takes several months to compile, hence why the latest showing the fourth quarter of last year was only recently released.

You can read more about house price developments in 2021 in our article here, which includes maps and tables: Property prices in France have increased by up to 19% in 2021: how has your region fared?

Here we highlight six key points from the report on the French real estate market in 2021.

House and apartment prices up almost everywhere

As mentioned above, property prices have increased almost everywhere in France in 2021. This is due to strong demand.

Our table below shows how the median price of houses and apartments has evolved in 2021.

Inflation could affect the real estate market

2021 has been a record year for sales and demand for property is high in France, but the report says that could change as inflation continues to rise.

Inflation rates hit 4.8% year-on-year in April, which the report said could “alter demand” and “reduce the number of sales.”

He mentions that this can affect the living expenses of potential buyers, a factor taken into account by banks when deciding whether or not to accept mortgage applications.

Higher loan rejection rate, more demanding banks

On that note, the report also says there has been an increase in mortgage denials over the past year, with banks “appearing to be more demanding”.

A new law came into force at the beginning of this year which obliges people who take out mortgages not to have a monthly debt ratio of more than 35%. This means that their expenses, including the monthly mortgage payment and any other loans, cannot exceed 35% of their income.

the notariesThe report suggests that this law could have an effect on mortgage approval rates.

Additionally, a separate report by mortgage broker Vousfinancer revealed that borrowers with debt levels below 35% are still being denied loans due to the distance between their work and their future home.

“We have recorded refusals of real estate loans because of the financial burden that this distance in fuel would represent or the purchase of a second car”, explains Sandrine Allonier, director of studies at Vousfinancer.

“From 30 kilometers, this poses a problem for banks.”

You can read more about this particular situation in our latest weekly property update here: Airbnb and tax, €1 house: four updates for landlords in France

Real estate market still lively despite the difficulties

An increase in mortgage rates and refusals and a general increase in property prices did not slow down the market boom in France too much.

“The appetite of the French for real estate is not over and the shortage of goods for sale shows it,” the report said.

“Although the trend is less strong, the market is still driven by sellers. This has the effect of continuing to push prices up.

In February 2022, sales started to rise again after a slight dip in January, reaching 1,187,000 (over the previous 12 months).

A study by the real estate advertising group Se Loger revealed that the number of properties offered for sale on its group’s websites fell by 22% overall in the last two years, between December 2019 and December 2021.

This decline was accelerated by the effects of the Covid pandemic, specifies the group.

Read more: Real estate prices soar in France: “the Covid effect” leads to a shortage of goods

The shortage particularly affects houses, which have been in greater demand since the start of the pandemic.

The number of houses put up for sale fell by an average of 13.8% each year between 2019 and 2021, compared to 4% per year for apartments.

It drives up real estate prices.

Pre-contract projections

Projections for the end of May this year, based on presale agreements (preliminary contracts), show that housing prices will continue to rise.

This is particularly the case for non-new houses, whose prices should increase by 9.9% over one year, against 4.1% for apartments.

Boom in coastal properties

There has been an unprecedented boom in the price of properties located along the French coasts.

the notariesThe report says 2021 has been “remarkable for the magnitude of price increases in the vast majority of coastal cities surveyed.”

The median price of non-new apartments in the littoral zone has increased by 8%, with normal rates since 2016 around 3% to 4%.

At the same time, the median price of non-new homes rose 16%, compared to the usual rates of 4% to 7% since 2016.

This is reflected in property prices, with some of the most expensive cities surveyed being located along the French coasts.

For example, the highest median price of a property in France is in Corse du Sud (Corse-du-Sud), at €475,500, up 18.4% compared to the fourth quarter. 2020.

In addition, Marseille / Aix-en-Provence also experienced a sharp rise in prices of 12.5%, bringing the median price of new buildings to €379,000.

And it’s a similar story in Toulon on the French Riviera, where the median price of non-new homes reached €427,900 at the end of 2021, up 9.2% on the previous year.

The only exceptions are non-new apartments for sale in La Ciotat (Bouches-du-Rhône) and Bastia (Haute-Corse). There, the median price per square meter of apartments fell year-on-year by 0.2% and 3.5% respectively.

You can see maps showing the evolution of house and apartment prices in France in 2021 in our article here: Property prices in France have increased by up to 19% in 2021: how has your region fared?

Related stories

MAPS: how rent prices vary between major cities in France

Data Notaire quarter 3 2021: Where are property prices rising the most in France?

Pools, prices, islands: five updates for homeowners in France

Comments are closed.