A Nouveau Era

Continuously an idyllic location for holiday homes, Abode2 investigates the recent changes and trends in the French property market

At a time when there is a shortage of housing in France, new property seems to be the essential solution to make up for the lack of supply of properties for sale on the market. The trend in off-plan sales is on the rise in the Îlede-France region, benefiting both clients looking for their main residence and investors.

Indeed, rental demand is very high and is constantly increasing, particularly thanks to the Greater Paris project and the preparation of the 2024 Olympic Games, making Paris an ideal location for investors, both private and professional.

Thus, new owners will have the assurance of seeing their properties increase in value, without the slightest risk of remaining empty. Added to this is the extension of the “Prêt à Taux Zéro” (zero interest loan) until 31st December 2022, as well as the continuation of the Pinel tax exemption scheme, which aims to encourage the construction of new housing in areas of high demand in France.

However, the health crisis and the various confinements have led to a production crisis which is increasingly worrying, and which is reflected in a drop in planning permissions. Of the 500,000 homes France would need each year to make up for the housing shortage, only 400,000 building permits are being issued, a drop of 15- 20% compared to 2018.

As housing is the number one item of household expenditure, property developers are adamant that the subject must be a central concern. It should also be noted that the health crisis, together with the increase in the cost of raw materials, is leading to an increase in the price per square metre of new property in France, putting Paris at the top with an average of 12,498 euros/m². Lyon (6,886 euros/m²) and Nice (6,098 euros/m²) are second and third respectively.

The figures from the “Laboratoire de l’Immobilier” also show a historic attraction for the outskirts of large cities - Levallois-Perret and Boulogne-Billancourt, for example, have become more expensive than certain Parisian districts. In short, there are many advantages to buying off-plan compared to buying older properties. Between reduced notary fees, VAT recovery, solid financial guarantees, high-performance housing and quality labels, buyers and investors will find what they are looking for.