Real estate: the market at a standstill in March... and what will come next?

Groupe BPCE's economists have been reviewing the situation confronting the existing, new-build and rental property markets at the end of 2019 and early 2020. Their work provides insight into the changing market trajectories resulting from the successive shocks caused by the epidemic both on the economy and on society as a whole.

Significantly lower sales volumes can be expected this year with, ultimately, a greater dispersion of housing prices triggered by renewed selectivity on the part of buyers. However, a scenario of a sharp, widespread fall in prices is difficult to envisage in 2020 considering the backdrop of persistently low interest rates. The repercussions will be of varying magnitude depending on the fundamentals of the extremely diverse regional markets, whose heterogeneity is likely to become more pronounced with the emergence of a greater premium on housing quality. The rental market could be affected more rapidly by the onset of the economic recession, which will make it more difficult for certain tenants to pay their rents, a situation liable to have a de facto knock-on effect on small private investors. 

This crisis, which affects both housing supply and demand, will certainly represent a sharp departure from the situation prevailing before the Covid-19 crisis but housing support measures could cushion the blow in view of the prevailing strong desire among households to buy their own homes: interest rates remain low despite a slight rebound, the distribution of loans is being maintained, real estate investment is looking more attractive in the light of stock market collapse, and the Government is taking specific measures. 

You can consult the complete study below (only in French).