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A Sunny Summer for the Real Estate Market

Posted by Sextant Properties on December 15, 2020

Business almost at a standstill and expectations for the future: For the real estate industry as for anyone, the first half of 2020 is unparalleled. So much so that we can detect the deconfining results without even anticipating them. Several pieces of good news brighten up this early summer: there has been a long-awaited recovery, all the players confirm. And, finally, interest rates remain at historically low levels.

A recovery on the rocks

The post-lockdown impact is there: as the newspaper Les Echos points out, the number of transactions in June 2020 is 35 per cent higher than in the same month of 2019. It’s still excellent news if it shouldn’t be seen as a massive sustained leap. The LPI-Se Loger barometer, for its part, announces an increase in the value of property at the end of May of +4.7% for apartments and +5.6% for houses, i.e. an overall average annual increase of 5.1%.

Improvement should be eligible when several projects unexpectedly materialized during lockdown remained on hold. The market’s seasonality makes spring months a pivotal period for a September move so it’s logical that transactions will shake up as soon as the recovery. Yet it all indicates that the health crisis pause only slowed real estate development, with no lasting negative effects on morale or rates.

Various motivations

The many buying projects identified within the real estate networks are partly motivated by the desire to go green linked to the lockdown: some workers realized that teleworking enables them to consider a new life project at home. Campaign while retaining intact also established their professional practice.

The work is also focused on parameters for wider surface area and an outdoor presence. New consequence of sometimes badly lived confining in cramped lodging.

Finally, the desire for home ownership seems to have increased, especially among first-time buyers.

Encouragement from banks

There is no evidence of the rise in interest rates on home loans, as noted during confinement. According to a report from the Banque de France, the impact of the rise seems to be attributed primarily to the greater share of spring loan renegotiations, in connection with new loans that have become rarer than normal. New deals have been at a very low rate since their signing.

Notice that on the other hand, the banks remain vigilant and pick the files they are lending to more dramatically. Customers are preferred to have already acquired and very good files, and benefit from more attractive rates.

If the real estate market seems to want to catch up with the delay in containment, we should remain cautious and keep the effort going. Relaxing the conditions proposed for the collection of dossiers and introducing steps to promote recovery would be profitable: generalizing zero-interest loans in the old ones and, for example, restoring the APL accession in mainland France. The three summer months will be decisive, given the seasonality of the market: to continue.

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