Faced with a certain resistance in 2020, will the luxury real estate market know how to adapt to a new year made more complex by the Covid-19 crisis? We are analyzing various hypotheses as certain indices announce the future of the market.
A stabilization of prices
After a surge in sales at the end of the first confinement, the luxury real estate networks are seeing a stabilization or even a drop in prices. In fact, sales become more difficult because sellers are not always aware of the health situation and the real value of their property, resulting in overly high prices and unsold properties. As a result, the Century 21 network believes that sales have peaked and that the market is beginning to decline. Thomas Lefebvre, Scientific Director of Meilleurs Agents, underlines in particular this phase of decline since September.
Nevertheless, although the capital and major cities are experiencing this downturn, other cities are managing to maintain a high pace, such as Lille or Nantes.
A desire to flee to rural areas
The upscale real estate market is being boosted by the new ambitions of buyers looking for a life far from the big cities, in a house in the country. This desire has developed with the increase in teleworking, which suggests the possibility of having a smaller property in the city and buying a second home in the provinces. However, these new desires are seen by some as ephemeral demand while others see it as the beginning of a new lifestyle.
According to a recent study by Liberkeys, a digital real estate agency, in 2021, half of the French want to move to the countryside, while 38% of those surveyed want to move to medium-sized cities. The Orpi network notes some reversals, some people who bought a property after the first confinement already resell their property. This can be explained by a rush to buy or when buyers find a new job that pushes them to move.
More accessible credit
What mainly feeds real estate projects are credits. Indeed, the access to these is easier. This can be explained first of all by a 1.20% drop in interest rates in November 2020 according to the Observatoire Crédit Logement. Also, the High Council of Financial Stability applies new conditions for access to credit. Nevertheless, credit poses a problem because its ease of access during a period of unemployment can cause more financial insecurity.
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