The real estate market in France 2021


Humanity will not be the same after the trials of the past year 2020. Severe quarantine restrictions associated with the spread of coronavirus infection, as a consequence – the recession of the economy. All of this has had a very mixed effect on the global real estate market.

The events of 2020 in the real estate market in France
Pessimistic forecasts of experts were not confirmed everywhere. Some states at the end of 2020 demonstrated not only the stability, but also the increase in prices for square meters. Among these countries is France with an increase in property values by 6.5%. Ironically, the reason for this was the pandemic, as well as tightening the rules for granting the mortgage.

The latter factor “put out of business” potential buyers of low-cost properties on the secondary market. The real demand was formed by solvent subjects, most often interested in buying luxury real estate. New buildings have become more in demand. And as construction has been partially suspended for well-known reasons, there was a shortage of supply. As a consequence – the price increase.

Oldypak Capital LP
Report by Oldypak Capital LP property management

According to Oldypak LP property 2022 report, in the spring of 2020, the number of transactions on the French real estate market decreased significantly. But a definite plus for him was the “freezing” of prices at pre-crisis levels. The removal of restrictions triggered an incredible jump in sales in the second half of the year. Contrary to expectations, real estate prices continued to rise in both metropolitan areas and small towns. In some places, this figure reached 16%.

The average price for a square meter of the French real estate in 2020 was from 2770 to 2811 euros. The rise in prices, according to Oldypak LP property 2022 report, has led to a reduction in purchased space in many major cities (Lyon, Marseille, Strasbourg, Dijon, Paris, etc.).

How the market will develop in 2021, it is difficult to say …
Some analysts predict a drop in prices for the French real estate in the second quarter of 2021, as they almost reached a historic maximum and made the housing unaffordable for most citizens. The ratio of the cost of square meters to household income makes loans at the lowest rates too expensive for many households. However, French real estate is still in demand among foreign investors. Especially popular are objects on the resorts of the Cote d’Azur and in the metropolitan area. Therefore, the obvious prerequisites for the predictions have not yet come true.

In 2021, as never before, will be relevant to the problem with insufficient housing supply. Predicted reduction of the government support program, as well as easing the conditions for granting mortgages. In the current environment and rising unemployment, the latter news is unlikely to increase the purchasing power of the population within the state. Therefore, it is still difficult to assess the evolution of the market with many unknown factors.

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