The French housing market
Q4 2021
The second-hand homes market recovered quickly following a dip due to the COVID-19 crisis. Sales, which were back to over 1 million in October, continued to rise through to August 2021 and a record number of transactions were concluded over the 12-month period (1,211,000). Sales have remained at a particularly high level ever since.
Conversely, the new homes market has struggled to return to pre-crisis levels. Even though the cumulative number of reservations in 2021 was up by +15% on 2020 with 109,131 apartments, this is still -11% lower than in 2019.
Despite the current COVID-related situation, the INSEE price index for second-hand apartments (which rose by +6.4% in 2020 and continued to climb by +5.2% over Q1-Q9 2021) reached 127.3 by the end of September. The same trend was seen for new-build homes for which the average price stood at €4,514 per sq m at the end of 2021 (+5% year on year).
€7.4 billion was invested in French residential real estate in 2021, this is a record level and represents a +7% year-on-year increase.
€6.3 billion was invested in the traditional residential market, 11% more than in 2020. Conversely, with €1.1 billion, managed assets posted a -11% year-on-year decrease. Volumes for retirement homes (-44% year on year) and student accommodation (-54%) may have fallen over 2021, but the investment volume for co-living was 13 times higher than in 2020.
Prime yields for traditional homes and co-living may have remained stable in 2021 but further yield compression was seen for student accommodation and co-living.