Notaires de France has published the final property figures for 2021, after what was a record year for the market in terms of sales.
It came on the back of a stunted 2020, when sales fell due to the coronavirus pandemic. That created pent-up demand, and also saw many projects pushed back, adding to the high number of sales last year.
The total number of sales over a 12-month period reached a peak in August 2021, with 1,212,000 transactions – this only includes ‘non-new properties’, meaning those more than two years old.
By January, this figure had fallen to 1,177,000 (over the previous 12 months).
The notaires’ report also shows that the median price of non-new properties around the country rose by 7.2% over the course of the year. The rise was highest for houses, with the median price rising by 9.1%, compared to 4.6% for flats.
This data is the fullest available as it takes into account all property sales and pre-sales that occur in France rather than data from individual estate agents.
It takes several months to compile, hence why the latest one showing last year’s fourth quarter has only recently been published.
You can read more about house price changes over 2021 in our article here, which includes maps and tables: French house prices rose by up to 19% in 2021: How did your area do?
Here, we pick out six key points from the report on France’s property market over 2021.
House and flat prices up almost everywhere
As mentioned above, property prices increased almost everywhere in France over 2021. This is down to high demand.
Our table below shows how the median price of houses and flats evolved over 2021.
Inflation could affect property market
2021 was a record year for sales and demand for property is high in France but the report says that this may change as inflation continues to rise.
Inflation rates reached 4.8% year-on-year in April, which the report says could “alter demand” and “reduce the number of sales”.
It mentions the fact that it may affect potential buyers’ living expenses, a factor that is taken into account by banks when deciding whether to accept mortgage applications.
Higher rate of mortgage refusals, banks more demanding
On that note, the report also says that there has been an increase in mortgage refusals in the past year with banks “appearing to be more demanding”.
A new law came into effect at the beginning of this year that requires people taking out mortgages to not have a monthly debt ratio of more than 35%. This means their expenditure, including the monthly mortgage repayment and any other loans, cannot be more than 35% of their income.
The notaires’ report suggests this law could be having an effect on mortgage approval rates.
Additionally, a separate report carried out by mortgage broker Vousfinancer found borrowers who have an indebtedness level of under 35% are still being refused loans because of the distance between their work and their prospective home.
“We have recorded refusals of mortgages because of the financial burden that this distance would represent in terms of fuel or even the purchase of a second car,” Sandrine Allonier, director of studies at Vousfinancer, said.
“From 30 kilometres upwards, this poses a problem for the banks.”
You can read more about this particular situation in our latest weekly property update here: Airbnb and tax, €1 house: Four updates for property owners in France
Property market still animated despite issues
An increase in mortgage rates and refusals and a general increase in property prices has not overly slowed down the booming market in France.
“The French appetite for property is not over and the shortage of properties for sale shows this,” the report states.
“Although the trend is less strong, the market is still driven by sellers. This has the effect of continuing to drive prices up.”
In February 2022, sales again began to rise after a slight slump in January, reaching 1,187,000 (over the previous 12 months).
A study by the property announcement group Se Loger found that the number of properties offered for sale on its group websites dropped by 22% overall over the past two years, between December 2019 and December 2021.
This decrease has been accelerated by the effects of the Covid pandemic, the group stated.
The shortage is particularly affecting houses, which are more in-demand since the beginning of the pandemic.
The number of houses put up for sale has dropped an average of 13.8% each year between 2019 - 2021, compared to 4% per year for flats.
It is causing property prices to rise.
Projections from avant-contrats
Projections for the end of May this year, based on pre-sale agreements (avant contrats), show that house prices will continue to rise.
This is notably the case for non-new houses, with prices set to rise year-on-year by 9.9%, compared to 4.1% for flats.
Boom in coastal properties
There has been an unprecedented boom in the price of properties located along France’s coastlines.
The notaires’ report states that 2021 was “notable for the magnitude of the price hikes in the vast majority of coastal towns studied”.
The median price for non-new flats in coastal areas rose by 8%, with normal rates since 2016 of around 3% to 4%.
Meanwhile, the median price of non-new houses rose by 16%, up from the usual rates of 4% to 7% that have been recorded since 2016.
This is reflected in property prices, with some of the most expensive towns and cities studied sitting along France’s coasts.
For example, the highest median price of a property in France is in southern Corsica (Corse-du-Sud), at €475,500, up 18.4% compared to the fourth quarter of 2020.
Elsewhere, Marseille / Aix-en-Provence also saw a steep price rise of 12.5%, bringing the median non-new house price up to €379,000.
And it is a similar story in Toulon on the French Riviera, where the median non-new house price reached €427,900 by the end of 2021, up 9.2% from the year before.
The only exceptions to this were non-new flats for sale in La Ciotat (Bouches-du-Rhône) and Bastia (Haute-Corse). There, the median price per square metre of flats fell year-on-year by 0.2% and 3.5% respectively.
You can see maps showing the evolution of house and flat prices in France over 2021 in our article here: French house prices rose by up to 19% in 2021: How did your area do?