Growing share of housing appears to be confirmed, according to Ikory

The housing market is doing well
© Imoz

The growing share of housing in total investment in France, “driven by the rise in interest rates for other asset classes and by interest rates still very low”, appears to be confirmed for the start of 2022, Ikory notes in his statement. most recent publication. economic report (see accompanying document).

The bulk sales market has confirmed its attractiveness in the past financial year. After a record year in 2020 with an increase of 77% compared to 2019, mainly driven by transactions initiated by CDC Habitat, the trend continues in 2021 with a total invested volume of €7.4 billion, an increase of 7% compared to 2020 and 85% since 2017 It alone represents 23% of the investment volume of all asset classes combined in France, compared to only 12% in 2017. This new record has been raised to 80% by investments in Île-de-France, mainly thanks to the AXAIM – In ‘Li transaction, which will represent a total of 30% of the investments in 2021.

For the year 2021, new construction remains the figurehead of investors with a share of 57%, ie 43% more than in 2017. This new appetite is partly explained by the changed strategy of developers (block sale against batch by batch) and should continue with the dissemination of ESG-like standards to many institutional investors and the implementation of the Climate and Resilience Act.

The share of managed real estate stabilized at 15% of the total invested amount in 2021, amounting to €1.1 billion. However, the order of the trifecta has evolved with the rise of co-living, which flirts with the top spot with a share representing 42% of the property managed just behind senior housing (45%).

Record on the old real estate market

With 1,178,000 sales in 2021, an increase of 15% compared to 2020, the housing market in the old sector has reached a record level. This increase is mainly reflected in the price level with a national evolution for houses of 9% and for apartments of 4.6%. The phenomenon could be associated with a post-health crisis effect caused by increased needs for space and exteriors and the proliferation of telecommuting, as well as sharp price increases in major cities that are pushing some of the more modest population has been forced to move away from city centers.

Although a slight fall in prices is felt in the Paris market, with an average of €10,600/m² (ie -0.9% intramural and -0.8% in Île-de-France), the market in the regions is reaching its peak of the game – mainly suburban and rural areas – with significant growth in volumes (+15.4%) and prices (+9.4% for houses and +8% for apartments), Ikory notes.

“In the medium term, the increase in borrowing rates in early 2022, combined with general inflation in construction costs, could have a greater impact on sales volume and prices in the coming years,” analyzes Stéphane Imowicz, President of IKORY

116,000 sales of new homes

For the new residential market, the year 2021 ends on a positive note with more than 116,000 sales, a 15% increase compared to 2020. Ads for sale follow the same trajectory with a 21% increase over one year. Commercial supply, on the other hand, shrank by 2% from 2020 and 4% from the 10-year average.

The new home market is struggling with a shortage of products – despite a 19% increase in building permits in one year – which can be explained by relatively scarce and expensive land, persistent demand, rising construction costs, too long administrative delays and too many appeals processes. endanger the profitability of the projects, Ikory states in his note on the situation.

Residential real estate in transition

The French housing stock is subject to significant regulatory changes with the promulgation of the Climate and Resilience Act in August 2021 on the one hand and the implementation of the RE2020 standard since January 1, 2022 on the other hand for new constructions.

Ikory notes an increase in the sale of energy-reduced homes (8% for apartments, 7.4% for houses), demonstrating the willingness of owners to arbitrate as a matter of priority over their assets condemned to obsolescence.

The renovation of the existing stock is therefore a major challenge. “The restrictive aspect of the new regulations will necessarily show up in volume and price statistics in the coming months,” thinks Stéphane Imowicz. “While we currently have no data to track these transformations, institutional and private owners are already on the scene to respond: greening of the park, arbitrage of thermal sieves, energy renovation works, the market has understood what the problem is and is already working on it. finding answers. †

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