According to the latest annual economic report from Grecam (attached), a research and consultancy firm specializing in real estate, the Parisian market for new collective housing is slowing down more than ever. In 2021, only 280 retail units were lost, a 16% decline compared to 2020 – a year marked by a historically low level of sales due to the health crisis and the municipal elections.
“Until 2002, the Parisian market sold between 1,500 and 2,000 homes per year on average, explains Grecam. Between 2003 and 2016, a slower cycle set in with a rate of 700 annual sales on average. Over the past five years, this slowdown has become more pronounced: around 530 reservations per year on average. »
The location of new supply remains quite similar to that of 2020. The programs are still concentrated in the 13e (the ZAC Paris Rive gauche includes three major programs of more than 100 lots), but also, from now on, in the 20e district which presents a plurality of small operations. “If in 2017 these two districts represented 22% of the capital’s sales, they covered more than 43% in 2021”, notes Grecam.
Extension of flow times
The lengthening of disposal times amounts to +2.71% in 2021, i.e. 21.5 months of inventory disposal time. It is due in particular to slow sales rates, on average 1.29 bookings/month and rarely exceeding 2.5 for the largest operations. “These “mixed” results are partly explained by the sharp increase in the average price, rising from €11,274/m² HP at the end of 2017 to €13,843/m² HP in 2021.”
Several exceptional programs (7e and 14e arrondissements) are positioned in a range from 20,641 to 25,181 €/m² HP. Only the 20e arrondissement still offers an offer at less than €12,500/m² average HP.
“Note a decrease in the stock of the Paris market in 2021 (-14%) due in particular to the numerous block sales carried out during the year 2021 (403 block sales against 280 retail sales). However, they did not really clean up the market. 2017, the lead times since then have continued to increase, going from 6.6 months in 2017 to more than 21 months in 2021.”
Renewed interest from institutional investors
“Since the covid-related crisis, we have seen a real renewed interest from institutional investors in the residential market, indicates Grecam. More and more institutional investors are positioning themselves on the Parisian market, looking for “safe” assets for which there is real rental demand. »
Over the past two years, the most emblematic block sale has been the “Wood Up” operation (123 housing units) in the ZAC Paris Rive Gauche (13e), Compagnie de Phalsbourg and REI Habitat, which was fully acquired en bloc by Gecina. Under this type of bulk sales, acquisition prices are now approaching retail prices. Depending on the volume of housing and locations, a discount of 3 to 7% is observed compared to the initial sale price.
In addition, faced with the rise in prices on the Paris intramural market, a dynamic relationship of late first-time buyers to western Paris (Issy-les-Moulineaux, Boulogne-Billancourt, Puteaux, Montrouge and Saint- Cloud…) has been observable for a few years, notes Grecam. These territories now meet the average 10,000 €/m² HP.
“Today, this relationship dynamic tends to refocus towards the North and the East of Paris offers still attractive prices. With the arrival of a growing number of Parisian customers, these areas are experiencing a rapid rise in average prices. For example, prices in the municipality of Saint-Ouen fell sharply (+40%) between 2017 and 2022, approaching the threshold of €8,000/m² HP and were reflected by a growing share of Parisian investment customers. »