Real estate trends – Third quarter results 2016
In the third quarter of 2016, the recovery begun at the end of 2015 continues. Real estate development activity is up sharply: over one year sales increased by 18.7% and sales (bookings) increased by 18.6%, driven by rental investment and home ownership. property. Building permits also increased (+ 20.0% year-on-year), resulting in housing starts up 10.8% year-on-year.
In the old, the transactions, still dynamic, exceed their level of 2011 and the prices recorded a third consecutive quarter of increase (+ 1.8% over one year). The volume of new loans contracted in the third quarter rose again as a result of the increase in renegotiations to reach 68.1 billion euros. At the same time, interest rates continue to fall, reinforced by the ECB’s still accommodating policy.
The activity of construction companies is improving, as are their prospects, but they remain below their long-term average. On the property development side, the outlook is above their long-term average, regardless of the activity horizon, but they are down compared to the second quarter.
IN THE NINE, ACTIVITY REMAINS DYNAMIC
Real estate development progressing again Reservations and sales to individuals continue to increase, driven by both rental investment and acquisitions of principal residences. Reserves increased 18.6% year-on-year with 27,753 units sold in the third quarter. However, bookings cancellations remain high (2,500 units canceled after 2,400 a year ago). Sales were also up 18.7% year on year to 26,554 units.
The recovery is steady with 116,915 units put up for sale over one year, up 17.4% from the same four quarters a year ago. Available-for-sale properties decreased (-2.5% year-on-year) to 97,622 units. Despite the continued high stock of unsold homes, apartment turnaround times continued to decline to 3.1 quarters, a decrease of almost 2 months from the third quarter of 2015, reflecting a better fluidity of market.
Housing starts up by including individual construction and social housing, the number of authorized dwellings increased by 20.0% over one year, compared with the third quarter of 2015.
Compared with the previous quarter, the increase was + 8.3%. Housing starts rose 10.2% year-on-year but were down on the previous quarter (-1.2%).
On a year-over-year basis, the number of authorized dwellings stood at 437,207 units, up 15.2% from the previous four quarters.
It was boosted by the 22% increase in collective housing permits. The number of housing starts cumulated for the year grew more slowly (+ 9.3% over the same period) to 369,516 units.
Production prices down
The cost of production in the building sector rebounded sharply over one year: + 0.6% after – 0.6% in the previous quarter, as well as production prices (+ 2.2% after – 1.2%). The index of wage costs in construction as a whole increased at a more sustained pace than the previous quarter (+ 2.6% year-on-year, + 2.3%), while the cost of materials index continued (- 1.6% year on year – 3.5%).
IN THE FORMER, THE TRANSACTIONS EXCEED THEIR 2011 LEVEL AND THE PRICES CONTINUE THEIR RECOVERY
Transactions continue to trend upward The number of transactions in old homes and apartments (cumulated over one year) continues to increase in the third quarter of 2016, reaching 838,000 sales (+ 1.1% compared to the previous quarter, Or 9,000 more transactions).
The volume of transactions thus exceeds its level of mid-2011. The prices of old homes are dynamic this quarter After a downward trend (moderate) from the end of 2011 to mid 2015, the price of the old (measured by the Notaires-INSEE index) has since rebounded slightly. In the third quarter, prices rose significantly (+ 1.2% quarter-on-quarter after -0.1%).
This increase is higher in the provinces (+ 1.4%) than in the Ile-de-France region (+ 0.9%). On a year-on-year basis, prices continued their rebound in mid-2015 and accelerated sharply (+ 1.8% after + 0.7% in the previous quarter). This acceleration is more vigorous in the provinces (+ 1.5% after + 0.2%) than in Île-de-France (+ 2.1% after + 1.5%).
EVOLUTION OF THE RENTS
In the third quarter, the annual rhythm of the progress of the rents of main homes – of the whole park, in constant characteristics – progresses with the same rhythm as in the previous quarter (+ 0,3 %). At the same time, consumer prices accelerate (+ 0,3 % after + 0,0 %). The reference indication of the rents, establishing the ceiling of appreciation of the rents in the course of lease, is almost stable as for him over one year (+ 0,1 % after + 0,0 %).
Conjoncture of real estate.
Result for the third quarter of 2016