SPOTLIGHT ON THE NEWBUILD 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 (students, tourists,
young workers) 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, which
supports home ownership for low-income households,
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.
Stéphanie Chopin
is head of our
VEFA department.
The newbuild market is on the rise