The Covid is beginning to make its impact felt on the real estate market. Indeed, while professionals in the field were surprised to see the situation of the real estate market remain stable, the latest figures tend to show that this crisis has been slow to show its effects. Depending on whether you are a buyer, seller or financier, the impact of the Covid can be a blow as a blessing. Indeed, between the tightening of access to credit, the rise in rates and the uncertainty of the economic recovery on the one hand, and the increase in the price of real estate on the other, the profile of borrowers is redefining itself.
Real estate market, rising prices despite Covid
In France, while we could expect a stabilisation of the prices of the real estate market, it is clear that the market has not heard it from the same ear. Thus, the health crisis has only postponed the projects of sales and real estate investments. Once the containment was lifted, the activity began to rise again. Decidedly a prime safe haven, French real estate has seen its value increase by 5.4% in six months.
The Covid has therefore not slowed the growth of the valuation of goods but has tightened the criteria for buyers. First-time buyers in particular are penalized. Thus, they are 5% less to make a home loan compared to the same period last year. This can be explained by a number of factors. As the price of real estate increases, the average amount of loans also increases (up 9.05% in the first half of 2020). At the same time, more income is also required to qualify. Thus, compared to 20216, borrowers in 2020 earn 7500 euros more on their average annual income than those of 2019. In the same vein, they are asked for 0.6% additional input.
Search criteria for post-covid real estate purchases
The rapid recovery in economic activity around the real estate market seems to be relatively easy to explain. In addition to the catch-up effect for sellers and buyers held back by containment, the period is also favourable. Thus, traditionally, one opts for a move before the start of the school year. Summer is therefore the key time to change housing. Second, real estate remains a safe haven. Despite theories about a possible price decline, market participants continue to show their confidence in the stone. Also, transactions are accelerated to anticipate the tightening of loans and the debt ratio.
In addition to these initial findings, real estate professionals have noticed a change in demand sinceMay. Which seem to continue to this day.
First, even buyers in the city are increasingly looking for an exterior. This criterion becomes less optional and buyers may prefer an outdoor space on the surface of the dwelling.
According to early post-confinement feedback, the trend would also have been for an extra room for an office. Telework left its mark on the minds of many buyers, who wanted to obtain a dedicated room, sheltered from the activity of the house. However, this demand seems to have become scarce, as the price per square metre often prevents the implementation of the process.
Finally, proximity to public transport continues to be a priority. As the desires are more to excentrate to afford a piece of garden, it is essential for buyers to be close to the amenities. This is particularly true in Bordeaux. Thus, real estate on the D tram line continues to gain value. Already popular areas for their location and calm, they attract all the more because they now offer quick access to the center of Bordeaux.
Health of the real estate market, the need to step back
Currently, it is important to understand that the real estate market has not yet been hit hard by the crisis. Indeed, thanks to the state measures, many companies have been and are kept in infusion. However, the counter-coup will allow us to know the true state of health of the French economy. We should therefore wait to see what the recovery really looks like in the fall.
For example, there is a risk of an increase in the unemployment rate. Which will reduce the number of purchase projects, as well as the investment capacity of those involved.