Coming to fruition and wait-and-seeAfter a typical post-holiday period, it is now time to take stock of how 2020 will close. We are approaching a crucial time. While in Q2 2020, the volume of total transactions with older properties over the last twelve months remains slightly above the million mark, growth compared to the previous year is down: from +10% in January to +2% in April. This figure made a slight recovery in May 2020 (+3%) but then fell in June (-0.7%) for the first time since July 2015. There has been a strong rebound in terms of post-confinement signings of pre-contracts, and notaries witnessed strong activity through to mid-August; ongoing sales which were not able to be signed could also be finalised thanks to remote electronic signings set up by notaries. Yet as the pandemic and economic uncertainty persists, a wait-and-see approach is required at this stage. It is reasonable to expect that the confinement may derail the million transaction mark by year-end: 2020 will be over 10 months and while there was a rebound in the summer, not everything will be regained. The shift seen in February 2020, unrelated to the health crisis, may also lead us to believe that the property market – which had a steadily growing stock and dynamic activity fuelled by still low rates – had indeed peaked in its catch-up since February 2013. The threshold of 900,000 sales year on year in 2020 seems to be the yardstick we’ll use to assess the

year. We can anticipate stagnating sales volumes through to the end of the year, with little sign of recovery until next spring and for only certain parameters:• an economic catch-up with GDP

expected to grow by +7.4% in 2021 (according to Bank of France forecasts on September 14), a recovery which should also benefit real estate;

• a health crisis under control.

The price curve has remained unaffected by these changes in volume. Indeed, prices are moving with a lag with respect to volume changes and only a strong and lasting drop in the number of transactions would impact prices. Covid-19 has

not lasted long enough to significantly alter attitudes and therefore prices. Only persistent and major economic consequences would be likely to achieve such a change.

Source: CGEDD according to notary databases and DGFiP (MEDOC)

500,000

600,000

700,000

800,000

900,000

1,000,000

1,100,000

Dec.-00 Dec.-02 Dec.-04 Dec.-06 Dec.-08 Dec.-10 Dec.-12 Dec.-14 Dec.-16 Dec.-18 Dec.-20

August 09 : 564,000

February 13 : 653,000

January 18: 972,000

February 12 : 834,000May 06 : 836,000

January 20 : 1,076,000

June 20: 1,009,000

Changes in the sales volumes of older properties in the period 2000/2020

•••

INSEE-Notary prIcE INdEx varIatIoN*

* Three-month variation (seasonally adjusted): between 1st quarter 2020 and 2nd quarter 2020 One-year variation: between 2nd quarter 2019 and 2nd quarter 2020

OLDER PROPERTIES OLDER APARTMENTS OLDER HOUSES

3 months 1 year 3 months 1 year 3 months 1 year

Mainland France 1.6 % 5.8 % 1.8 % 7 % 1.4 % 4.9 %

Greater Paris 1.8 % 6.6 % 1.8 % 7.3 % 2 % 5 %

French Provinces 1.5 % 5.5 % 1.8 % 6.8 % 1.3 % 4.9 %

*Change in early indicators based on pre-contractsin mainland France: projection at end-October 2020.

Older apartments

Olderhouses

Change 3 months* 2.1 % 2.6 %

Change 1 year* 7 % 6.4 %

LatESt trENdS

No. 49 - october 2020

Sales of older properties over 18 months, from January 2019 to June 2020

property reportFrench market

No. 49 - october 2020property reportFrench market

Rouen€ 340,000

4.1 %Reims

€ 238,00010.7 %

Lille€ 198,000

8 %

Nantes€ 320,000

10.3 %

Bordeaux€ 355,000

7.1 %

Montpellier€ 329,000

3.6 %

Tours€ 225,000

1.6 %

Chartres€ 210,000

15.4 %

Lyon€ 363,200

10.1 %

Le Havre € 178,000

4.7 %

Grenoble€ 304,000

6.9 %

Saint-Étienne€ 195,000

0 %

Metz€ 240,700

11.9 %

Nancy€ 198,200

10.4 %Troyes

€ 166,50010.7 %

Châteauroux€ 124,500

13.2 %

Greater Paris € 323,700

5 %Caen

€ 240,00014.3 %

Dijon€ 249,100

17.5 %

Limoges€ 156,000

6.1 %

Amiens€ 154,000

4.9 %

Tours€2,52013.5 %

Saint-Étienne€ 1,000

8.7 %

Orleans€ 2,100

6.7 %

Grenoble€ 2,280

6.6 %Bordeaux€ 4,220-3.4 %

Montpellier€ 2,860

10 %

Toulouse€ 3,04010.8 %

Nantes€ 3,52013.7 %

Dijon€ 2,19011.2 %

Limoges€ 1,160-5.4 %

Poitiers€ 1,650

3.6 %

Rennes€ 3,070

6.4 %

Caen€ 2,170

5.7 %

Besançon€ 1,720

4.1 %

Nice€ 4,050

7 %

Reunion€ 2,180

2.2 %

Martinique€ 2,400-2.3 %

Guadeloupe€ 3,08011.9 %

Corse-du-Sud€ 3,420

9.4 %

Corse-du-Sud€ 372,000

-4 %

Haute-Corse€ 2,44010.1 %

Haute-Corse€ 250,500

-0.6 %

Reims€ 2,170

7.1 %

Toulon€ 2,200

6.1 %

Paris € 10,690

8 %

Lille€ 3,47014.5 %

Rouen€ 2,380

2 %

Amiens€ 2,20018.3 %

Nimes€ 1,820

1.8 %

Bourges€ 1,160-1.8 %

Marseille€ 2,550

8.9 %

Nancy€ 1,960

3.6 %

Metz€ 2,120

17 %

Clermont- Ferrand€ 1,690

3.5 %

Bayonne€ 3,110

5.2 %

Strasbourg€ 2,900

8.5 %Mulhouse€ 1,140

9.8 %

Lyon€ 4,75011.2 %

Marseille/ Aix-en-Provence

€ 325,0002.8 %

Brest€ 183,000

4.9 %

Nimes€ 216,200

4.5 %

Toulouse€ 290,000

3.6 %

Orleans€ 212,000

9.6 %

Angers€ 250,900

9.1 %

Montauban€ 191,700

12.1 %

Toulon€ 371,800

-0.4 %

Poitiers€ 170,000

7.6 %

Guadeloupe€ 297,500

25.8 %

Reunion€ 215,000

-1.4 %

Annual change in selling prices Less than -2% -2% to 2% More than 2%

Source: Property databases of Notaires de France(The prices for Greater Paris are valuations from the INSEE and Notary indexes for the 2nd quarter of 2020)

MEdIaN SELLINg prIcE oF oLdEr HoUSES IN tHE 2nd QUartEr oF 2020

Year-on-year change: 1 April 2020 to 30 June 2020 / 1 April 2019 to 30 June 2019The statistics for houses cover the whole urban area (city centre + suburbs)

MEdIaN prIcE pEr M2 oF oLdEr apartMENtS IN tHE 2nd QUartEr oF 2020

Year-on-year change: 1 April 2020 to 30 June 2020 / 1 April 2019 to 30 June 2019

ANNuAL price change per sq. m.

Less than -2% -2% to 2% More than 2%

Source: Property databases of Notaires de France (Prices in Greater Paris based on the values in the INSEE and Notary indexes of Q2 2020)

No. 49 - october 2020 property reportFrench market

Pre-contractsIn mainland France, the price changes seen in Q2 2020 continued until October 2020 at a faster pace for the apartment market (+2.1% versus +1.8% in Q2 2020) and even more so in the house market (+2.6% versus +1.4% in Q2 2020).In Greater Paris, early indicators from Notaires du Grand Paris pre-contracts, the majority of which were signed after the confinement (May-July 2020), point to an overall continuation – or even sharpening – of the upward trend by October, with new developments by market segment and geographical area. There is expected to be an annual increase of 6.6% in Paris, which would set the price per m² at € 10,860. Nonetheless, the rise in prices would be for both apartments and houses in inner suburbs, which could come close to 9%. Lastly, the greater Paris region is expected to see price increases close to, or higher than, the Capital (+ 6.1% for apartments and +7.6% for houses).In the provinces, the projections based on pre-contracts point to a further rise in prices, with an even more bullish trend for houses.

a significant recovery once a remedy is found. There is ongoing concern for office buildings. The growing trend of teleworking will lead to a rationalisation of needs and costs, urging this sector is to downsize.

The rental investment sector – already shaken up by the restrictions on seasonal rentals especially in large cities and tourist towns – is expected to suffer from the Covid-19 restrictions imposed on movement and the drop in tourist numbers. Individuals requiring a furnished rental to meet their repayments and expenses may be forced to sell in order to balance their finances.

The new housing market - Key figuresHousing construction St@t info No. 299 - August 2020

Change Q/Q-1 (*)

AllSingle

occupancy

Multi- occupancy buildings(including

blocks of flats)

Approved housing

-8.4 % -6 % +10.1 %

Builds in progress

+25.2 % +29.5 % +22.5 %

(1) Last three months compared with the previous three months. Source: SDES, Sit@del2, estimates at the end of July 2020

Sales of new dwellings Q2 2020 results St@t info No. 293 - August 2020

2nd quarter 2020

Number of reservations-41.7% year on year

(20,380 units)

Properties put up for sale-47 % year on year

(18,350 units)

Property outstandings-13.5 % year on year

(96,478 units)

Cancellations of sale reservations

+31.4 % year on year (4,868 units)

Source: SDES, ECLN

In late October 2020, quarterly developments are expected to range from +1.5% for apartments and +2.5% for houses.

The housing sector is to remain unscathed thanks to a market of users. To take the example of Paris, while the number of offer requests has undoubtedly declined, falling from ten to five buyers per seller, there is still a market shortage. Sellers’ psychology has changed, as they now have fewer expectations and are less demanding.

Real estate is, more than ever, a safe haven. This has proven to be the case yet again, even in these uncertain times. It is extremely resilient.

Office real estate is expected to bear the brunt of the coming months and may be highly impacted both in terms of volumes and prices. Business tied to tourism, hospitality, catering, nightclubs and bars have been severely affected by the counter-Covid-19 measures, be it for the restrictions now in force or the businesses not being set up given the current climate. The sector could, however, undergo

Credit - Bank of France dataHome lending rose by 5.3% year on year

Outstanding housing loans to individuals rose by 4.7 billion euros – an increase comparable to the average monthly variation for the last three years (4.8 billion). This rise is similar to that seen in August 2019 (+4.9 billion); as such the annual growth of loans remained relatively stable (+5.3% in August 2020 after +5.4% in July).

Monthly home lending – excluding renegotiations (and external repurchases) – amounted to 16.4 billion euros in August 2020, up from July (14.1 billion). Renegotiations continued to fall, at a 15.2% portion of new lending (after 20.5% in July).

0

10

20

30

40

50

60

70

80

90

0

5

10

15

20

25

30

35

40

45

Aug.-16 Feb.-17 Aug.-17 Feb.-18 Aug.-18 Feb.-19 Aug.-19 Feb.-20 Aug.-20

Renegotiated home lendingHome lending excluding renegotiationsProportion of renegotiations (right-hand scale)

The annual growth rate of consumer lending is up (+1.1% in August, after +0.7% in July).

In total, the annual growth rate of personal loans remained almost stable (+4.7% in August after +4.8% in July).

The interest rate on new housing loans (including renegotiations) rose by 2 basis points to 1.31% in August, and that excluding renegotiations rose by 3 basis points to 1.30%.

1.311.30

1.10

1.20

1.30

1.40

1.50

1.60

1.70

Rates (including renegotiations) Rates (excluding renegotiations)Au

g.-17

Nov.-1

7

Feb.-

18

May-1

8

Aug.-

18

Nov.-1

8

Feb.-

19

May-1

9

Aug.-

19

Aug.-

20

Nov.-1

9

Feb.-

20

May-2

0

Year on year price changes of older properties in France

Source: INSEE, ADSN-BIEN-Notaires du Grand Paris, Notaires de France - Perval. Scope: France (excluding Mayotte)

Rates of new home lending (of all terms)

Proportion of renegotiations in new home loans (as %)

Source: Bank of France

Source: Bank of France

No. 49 - october 2020property reportFrench market

Contact: Conseil supérieur du notariat (High Council of French Notaries), Development department

Editorial committee: Rozenn Le Beller, Frédéric Violeau, Thierry Delesalle, Françoise Vichot, François Proost

Publication Director: Isabelle Mariano

Published by: Conseil supérieur du notariat 60, boulevard de La Tour-Maubourg - 75007 Paris Tel.: +33 01 44 90 30 00 - www.notaires.fr

Production: ADNOV

ISSN: 2100-241X - Photo credits: iStock

definitionsSeasonally adjusted indexesIn the same way that the index calculation method smooths out structural effects, corrected seasonal variations adjust seasonal fluctuations. The purpose is to ensure a fair comparison of trends between two consecutive quarters, without this interpretation being distorted by the time of year. For example, property prices rise during the third quarter of each year, house prices in particular, due to demand from families driven by the school year.

Median pricesThe INSEE (French National Institute of Statistics & Economic Studies) and Notary indexes are only available for geographical areas where the number of changes of ownership is high enough. At more detailed levels, median prices are used. The median price is such that 50% of transactions were concluded at a lower price and as many at a higher price. It more accurately represents the “midpoint” of the market than the average, as it is less affected by extreme values.

INSEE (French National Statistics & Economic Studies Institute) and Notary indexesThe calculation method used for the INSEE and Notary indexes is based on econometric models which break down the price of a property according to its main characteristics (location, size, comfort, etc.) in order to be better able to withstand structural effects that cause transaction prices to vary from quarter to quarter.

MaPrime Rénov’As part of its energy renovation policy, the government has overhauled the aid system to make it simpler, fairer and more efficient. The transformation of tax credits for energy transition (CITE) into a single premium (MaPrime Rénov'), which launched on 1 January 2020 for homeowners with low and very low incomes, was an initial step. The reform will be finalised in 2021 by extending MaPrime Rénov’ to all homeowners (regardless of income). Households that are not currently eligible can already start the process of submitting their applications as of 1 January 2021.

As part of the stimulus plan, there will be exceptional premiums to help fund works to insulate housing, strongly encouraging comprehensive and ambitious renovations. MaPrime Rénov’ will also be open to condominiums and landlords.

FinanCial aid FoR housing eneRgy RenovaTion

ADEME and the FAIRE network offer a financial aid simulation tool to help you when applying for your property’s energy renovation.

The Simul'Aid€s tool is still the most efficient way to find out what support is available to you.

• www.faire.gouv.fr/aides-de-financement/simulaides

9

5. Le parcours de rénovation

• Un parcours accompagné

MaPrimeRénov’ permet aux propriétaires de s’engager dans un parcours de rénovation par étapes, en fonction de leurs besoins et de leurs moyens. Le montant de la prime est forfaitaire, de façon à encourager les travaux les plus vertueux.

Pour se renseigner et être conseillé gratuitement par un avis neutre, des conseillers du réseau FAIRE sont disponibles pour vous. Ils sont présents sur la majorité du territoire.

• Une aide cumulable

Pour les mêmes travaux, MaPrimeRénov’ peut se cumuler avec les aides versées au titre des Certificats d’économies d’énergie (CEE), les aides des collectivités locales et celles d’Action logement. Par ailleurs ces travaux bénéficient de la TVA à 5,5 %.

• Accompagnement des ménages

Les premiers retours d’expérience de MaPrimeRénov’ indiquent que l’accompagnement est fondamental pour une part impor-tante des ménages afin de bien appréhender les travaux de rénovation énergétique, choisir ses artisans et réaliser l’ensemble des démarches administratives. Par ailleurs, cet accompagnement permet de réduire significativement le risque de fraude.

Aussi, à partir du 1er janvier 2021, une partie de l’accompagnement pourra être financée par MaPrimeRénov’ dans le cadre du forfait AMO (Assistance à maîtrise d’ouvrage). Ce financement sera de 150 euros. Cet accompagnement devra être effectué par une entreprise diffé-rente de celle qui fait les travaux.

Par ailleurs, le gouvernement a engagé de nombreuses actions pour protéger les Français et les artisans contre les pratiques frauduleuses. Les conditions du label RGE ont été revues, les contrôles et audits ont été renforcés et les échanges de données entre administrations pour détecter les fraudes ont été facilités.

Les Certificats d’économies d’énergie bénéficient aux ménages et aux entreprises. Ces aides reposent sur une obliga-

tion de réalisation d’économies d’énergie imposée par les pouvoirs publics aux vendeurs d’énergie. Ils sont soit proposés

directement par des fournisseurs d’énergie ou des déléga-taires, soit directement déduits sur le devis de vos travaux

Pour en savoir + : www.faire.gouv.fr

Lutte contre les fraudes à la rénovation énergétique, les 7 réflexes à adopter

1. Le démarchage téléphonique pour la rénovation énergé-tique est interdit, sauf si vous avez déjà un contrat avec la personne qui vous contacte (fournisseur d’énergie, entreprise de travaux que vous connaissez)

2. Méfiez-vous des entreprises qui démarchent (porte-à-porte, mails) surtout si elles se disent envoyées par l’État

3. Ne communiquez jamais vos coordonnées bancaires et ne signez jamais rien le jour-même

4. Exigez un devis et comparez avec d’autres

5. Ne signez jamais l’attestation de fin de travaux avant que le chantier soit totalement terminé, surtout si un crédit a été contracté

6. En cas de litige, tournez-vous vers des associations de consommateurs pour vous faire aider

7. Si vous pensez avoir affaire à une entreprise aux pratiques frauduleuses ou non conformes, contactez votre conseiller FAIRE ou signalez-le via le formulaire ci-dessous.

Service public de conseil gratuit et d’information sur la rénovation énergétique, FAIRE accompagne ceux qui le souhaitent dans leurs travaux. Il permet notamment de :

Æ trouver rapidement un professionnel proche de chez soi ;

Æ rechercher les solutions les plus adaptées ;

Æ estimer le budget nécessaire et les aides financières dont il est possible de bénéficier.

Conseiller FAIRE : 0 808 800 700

www.faire.gouv.fr/marenov

Pour signaler un cas suspect : www.faire.gouv.fr/iframe/reclamation

 Aid changes regularly so feel free to consult a FAIRE advisor (Monday to Friday from 9am to 6pm by calling +33 0808 800 700) and find out more about what aid you may be eligible for.

For further information: www.faire.fr

In collaboration with ADEME (Ecological transition agency)

As part of a renovation project, individuals may be eligible for financial aid. For insulation, heating changes or a full renovation... criteria relating to the property, the individual’s situation and technical characteristics of the installations must be met in order to obtain financial aid for housing renovation. Different aid can sometimes be cumulated for the same work.

KeyJ Combinable

Non-combinableMaPrime rénov’

tax credit for the energy transition

(cIte)Zero-rate eco-loan

ANAH (national housing

agency) aid

Local government

aid

energy supplier

aid

Action Logement

aid

MaPrime rénov’ J J J * Capped

J * Capped

tax credit for the energy transition (cIte) J

J ** Capped

J ** Capped

J

Zero-rate eco-loan J J J J J JANAH (national housing agency) aid J J J

Local government aid J J** Capped

J J J J

energy supplier aid J* Capped

J** Capped

J J J

Action Logement aid J* Capped

J J J J

The energy cheque, exemption from property tax and pension fund aid can also be combined with the aid set out in this table.* MaPrime Rénov’ is capped so that the cumulative amount of aid does not exceed 90% for homeowners with very low incomes, or 75% for homeowners with low incomes.** The CITE is capped so that the amount of CITE aid does not exceed 75% of the eligible spending actually incurred by the household.

No. 49 - october 2020 property reportFrench market

You’ll find all the French property reports at www.notaires.fr