New home : Where is the market going in 2021 ?

If the activity in the market of the former resists, in the new, the collective is in the red. In particular in tense areas. The impact of the health crisis, which has blocked and then slowed construction, the decline in building permits, high prices, the shortage of housing, and the postponement or reconsideration of certain real estate projects by new municipal teams are all affecting the sector. Here is an overview and projections.

Assessment of 2020: Key supply and demand indicators

In terms of the supply of new housing, over the past nine months, the decline in private development has reached 40% (-36,000 units), and all regions are affected. The shortage is close. On the demand side, fewer than 20,000 homes were purchased in France by individuals in the third quarter of 2020. Over 9 months, the decline reached -30% (-34,000 homes). This decline in sales concerns both home ownership and rental investment. Below is the table from the FPI Observatory (Federation of Real Estate Developers).



New home prices are still high

What is rare is expensive. Average price of a new apartment in VEFA in the regions: 4,200 €/m2 (+ 3, 5 % over one year). In the Ile-de-France region, the price reaches €5,200 per square meter. This is the paradox: fewer and fewer new homes are being produced and sold, yet new housing is becoming increasingly expensive. If the high cost of land explains this in part, the question of affordable housing for the middle classes has not been resolved. Below is the FPI's table on prices.



Construction in the red

Building permits, construction starts... Table, source BPCE group.





Outlook for 2021: indicators to follow

Here are some elements to take into account in order to have a vision of the new housing market over the next few years. Solvency, financing, support mechanisms, new environmental regulations and new housing production guidelines.

PTZ and Pinel: Support measures extended

In a context of crisis, there is some visibility provided in the PLF (draft finance law 2021): the extension until 2022 of the Pinel rental investment scheme for investors and the PTZ (zero rate loan) for first-time buyers. This support for demand also makes it possible to produce housing and thus to maintain or even create jobs. Housing policy summary table (source BPCE).