A House Becomes Home for More and More Parisians
According to the Paris Chambre de Notaires, the new confinement had little impact on real estate activity, which remained strong even given the circumstances. Resale homes sold in Ile-de-France from September to November 2020 were as many as 46,640, barely 2% less than the same period in 2019 and 21 percent more than the average for the past 10 years.
This is all the more remarkable since 2019 was a record year. These transactions relate to pre-sale contracts signed two to three months earlier, in June and during the summer months when economic activity had regained fluidity.
Unlike the first confinement, the second confinement did not stop the signing of the deeds of sale. On the other hand, the impossibility of organizing property visits led to a significant decline in pre-sale contracts, which will slow sales volumes in the first months of 2021.
The renewed interest in homes vs apartments is reflected in a 4% increase in sales volumes when comparing the September-October-November 2020 period with the same period in 2019. Conversely, the number of apartment sales fell by 5%.
In Paris, activity remained down by 13 percent, in line with the previous months. In Ile-de-France, housing prices rose 6.6% in one year, from November 2019 to November 2020. The annual increase reached 6.5% for apartments (more specifically 6.3% in Paris) and 6.9% for houses.
The trends already observed in previous months are confirmed. For houses, the annual price increase is accelerating and the quarterly variation remains notable (+2.4% in the 3 months from August to November, and especially +3.3% after seasonal adjustment), probably under the pressure of demand. Apartment prices rose more moderately (+1.5% in 3 months).
According to indicators from the pre-sale contracts, these evolutions seem likely to continue. In Paris, the price could go from €10,850 per square meter in November 2020 to €10,700 per square meter in March 2021, an anticipated drop of 1.4%. As a result of this recent downward trend, the annual increase in apartment prices could be limited to 2.3% in March 2021 in the Capital City, the lowest level in the region with the Seine-et-Marne (+1.9%).
The annual price increase would still remain at 6.2% for apartments in the Petite Couronne but could be reduced to 3.4% in the Grande Couronne. Finally, according to the pre-sale contracts, prices should increase by a further 1.3% for houses from December 2020 to March 2021. This could confirm an annual price evolution of around 7% in both the Petite Couronne and the Grande Couronne.
The complete report issued by the Chambre de Notaire can be downloaded here.
The Adrian Leeds Group
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