Closed real estate agencies, visits made impossible, closed notary offices… The real estate sector is taking the brunt of the coronavirus crisis and the containment measures it implies. "There are reasons for this market to resist better than the others, but it cannot be unscathed," explains Henry Buzy-Cazaux, president of the Institute for Management of Real Estate Services (IMSI). Nothing will ever be the same again. "
The unprecedented situation put a brake on a very dynamic sector in Ile-de-France: + 5% increase in prices in Ile-de-France over one year, + 10.2% for Paris on the same period, according to MeilleurAgents. 176,600 sales were recorded last year in Ile-de-France by notaries ... A record! At the start of the year, with falling unemployment, no one saw a change: 2020 would be as good a vintage - if not better - than 2019 ... It was without counting on the coronavirus health crisis.
More or less pessimistic forecasts
"I expect a drop in prices of around 5% for large cities including Paris, 10% for medium-sized cities and rural areas," predicts Henry Buzy-Cazaux. The boss of the Se Loger group, Bertrand Gstalder, also sees a drop in prices, "but not brutal, of the order of 0 to 5%, no more". Others do not risk the game of forecasts: "Everything will depend on the duration of the confinement and the economic impact it will have on the country at the end," notes Philippe Buyens, head of Capifrance.
VIDEO. Coronavirus: "It's going to be worse than September 11," says a San Francisco Frenchman
Containment forces people to stop buying. Small ad sites have seen their traffic plummet. Housing, market leader, has lost 50% of its traffic since the start of the crisis. And others, who had in mind the plan to buy, could postpone it. "Already fragile businesses will have to close, people will lose their jobs, others and in particular tenants will have to take their savings to cope and therefore no longer have enough to buy ..." list Philippe Buyens. For the same reasons, sales that were nearing completion may be canceled.
Bargaining margins
Opposite, sellers could be in a hurry to sell. And the longer it will be necessary to wait for the end of confinement, the more these owners will lower the price, according to Karl Toussaint du Wast, co-founder of Netinvestment. "It will be an epiphenomenon," he explains. But we can expect price drops on some goods of 15 to 20%. "
A situation that some buyers might hope to take advantage of to negotiate aggressively. "But it will not be a window to do good deals every time," warns Kart Toussaint du Wast.
Paris spared, the medium and rural towns more affected
If even prices in Paris were to drop, the “very robust” market would only be slightly affected: prices have so far increased to almost 1% each month… “People who buy in Paris have better means than others , explains Henry Buzy-Cazaux. They will be little affected by the economic impact of the crisis. And the president of IMSI specifies: "Medium-sized cities and rural areas will be the most affected, households are less fortunate, more fragile and the decline in solvency will be greater ..."
"The longer it lasts, the more the consequences will be serious," explains Philippe Buyens. At Capifrance, the situation is all the more critical as the network operates with 2,500 independent real estate agents who without sales have no income. Henry Buzy-Cazaux projects: “There will be a recovery in the market as the economy rebuilds. But even when the crisis is over, there will still be the threat of a return of the virus, of a second wave ... ”
The essentials of the news
Every morning, the news seen by Le ParisienI'm registering
Your email address is collected by Le Parisien to allow you to receive our news and commercial offers. Find out more
READ ALSO:
> Faced with the coronavirus, notaries anticipate a fall "in prices from 10 to 15%"
> Because of the coronavirus, "everything is stopped", worries a buyer
-
What has happened in the past?
Can we project ourselves on what the consequences will be, on the real estate market in France, compared to what we have already experienced around the world? The research department of Zillow, an American real estate ad portal, has looked into what has happened around the world in the past.
"During epidemics such as the 1918 flu or the 2003 SARS epidemics, economic activity fell sharply during the epidemic but declined rapidly after the epidemic ended," he explains, in an article published in mid-March. This pattern differs from a standard recession, which is a situation in which economic activity falls for 6 to 18 months and then recovers more slowly. "
A peculiarity which is also reflected in the real estate market. In Hong Kong, the epicenter in 2003 of the SARS epidemic, property prices had stagnated while volumes had dropped drastically, with potential buyers avoiding to travel to avoid contamination. "By the time the epidemic was over, transactions had returned to normal volumes," notes Zillow. In China, the epicenter of Covid-19, the first figures for 2020 show an almost total halt in transactions, but also "prices that have not fallen".
Our articles on the coronavirus:
- Our entire dossier on the Covid-19 epidemic
- The coronavirus in questions: the editorial team is mobilized to answer all your questions
- Confined life: advice, testimonies and rules to respect
- Coronavirus, the essential to know: every day at midday, our newsletter to take stock
- Podcast: what scientists have learned about the Covid-19
- Economy: the consequences of a global crisis for companies and employees