Rising prices and optimism for the French property market as we head into 2021
PUBLISHED: 16:50 05 January 2021 | UPDATED: 16:50 05 January 2021
Property prices continue to multiply despite an unsteady year for the French property market
Despite the pandemic and multiple lockdowns which brought uncertainty to many industries, the French property market has been resilient. Recent data shows that prices across France have continued to rise – in fact property prices have risen in 100% of French cities – and estate agents say they are optimistic that demand will continue to rise in 2021.
French property prices have tripled
Not only have property prices increased in all major French cities this year (locations with over 100,000 residents), according to SeLoger the average price of a property in France has almost tripled over the last 25 years, The online French real estate experts found that in 1995 the average cost of a home in France was €1,056/m2, which rose to €2,700 in 2019, before rising again to €2,807 in 2020.
In Paris the upwards trajectory is even more astonishing. The average cost of a square metre in the capital multiplied by five over 25 years, from €2,478 in 1995 to €10,552 this year.
The growth has been particularly pronounced in other cities, too. Over the last decade prices in Nantes have almost doubled, with a significant increase in the last four years. Perhaps this is unsurprising, as Nantes was voted the second best city in France for the second year in a row. Residents praised the high employment levels, quality of life and low cost of living in the Loire-Atlantique city.
In the last year specifically, property prices have been impressively healthy despite the closure of estate agencies and prohibition of property viewings during the first lockdown. According to the recent Notaires de France report, house prices rose by 4.2% and apartment prices rose by 6.5% in the 12 months before September, and demand continued to increase too, though (unsurprisingly) not quite at the same rate as in 2019.
Why is this?
In short, the acceleration of property prices during 2020 can be largely attributed to the continued demand for properties, but a lack of supply as a result of the Covid-19 lockdowns. While many people have been unable to move, others have been prompted by the confinement to move out of city centres and into areas with more space and a better quality of life – perhaps this is why properties on the outskirts of cities have been increasing faster than those in the centre, an unusual trend.
Historically low mortgage rates and the rush of foreign nationals trying to buy before Brexit could also be contributing factors in the rising prices.
Though transactions ground almost to a halt during the first lockdown, by summer, when restrictions were lifted for the first time, there was a huge pent-up demand which saw estate agents flooded with enquiries as buyers and sellers played catch-up. Since then, transactions have remained at a healthy level thanks to the use of virtual signings and property viewings which have been welcomed by both agents and buyers.
How is 2021 shaping up?
Even with the continued threat of Covid-19, it’s looking like prices will continue to rise in 2021, as will the number of property transactions. Leggett Immobilier have reported that they are optimistic and entering 2021 with a sales pipeline that is 60% higher than this time last year, and, if the Covid effect continues, more and more people will be seeking properties in more rural areas. Whether the growth will be affected by Brexit remains to be seen.
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