Housing Demand Forecast to Remain Strong
A major study into the future demand for housing in France has concluded that demand will remain strong in the coming years, with the need for around 500,000 new homes a year up to 2020. The study was carried out for the French mortgage specialist Crédit Foncier by the University of Paris-Dauphine. The research team base their forecast on four main structural trends taking place in the country – an ageing population, the breakdown of the family, growing professional mobility and levels of migration.
Ageing Population
In 2005 there were nearly 13 million people in France over the age of 65 years, a figure that will grow by 10 million to 2050, when seniors will comprise one third of the population. This growth will not only reduce the number of homes coming on to the market, but it is also increasing the demand for second homes by this group. In effect, the order of the day is ‘mobility and security’, with retired persons buying two or more homes, which offers them one home for winter and one for summer, or one to meet their existing needs and one that will be suitable in older age.
Future of Family
The report points a bleak picture on the future of the family, with divorce rates continuing at around 40%, an increase in those wishing to live alone, and many young adults seeking to move out of the family home as quickly as possible to share with friends. The authors consider the trend towards the breakdown of the family to be ‘irresistible’, and that it will continue to push the demand for more homes.
Employment Mobility
Employment trends are also driving the demand for second homes, with an increasing number of professionals leading a nomadic lifestyle, working away from home during the week and returning home at the weekend. Somewhat perversely, therefore, the growing instability of employment, with many jobs now on fixed terms and based around ‘projects’ and ‘missions’, is resulting in increased pressur on the housing market.
Migration
Finally, the study also considers that France will continue to remain a popular country for those arriving from Africa, and to North European and US buyers. The authors argue that there is likely to be an increase in the number of younger families relocating from within the EU, who will continue to maintain employment in their home country and work at distance, or commute between their place of work and their home in France. In the past, France has barely managed to construct half the number of homes each year that the study considers is needed if pressure on the housing market is to be controlled. There has been a spurt in construction in the last couple of years, but there are already signs that the enthusiasm of developers has begun to wain.
Opportunity
Whilst the buy-to-let market in the UK is now saturated, across the channel, better returns and capital gains are still providing good investment opportunities. If you are interested in finding out more about how to purchase new build property to cash in on this forecast housing demand, please visit our latest IFP Guide to purchasing property off-plan in France .
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