“Bordeaux, evolution of the housing market”, Interview by Christian LOUIS-VICTOR
The housing market in Bordeaux has changed considerably over the decade. Real estate prices have soared by 40% or even 60% in some neighbourhoods. On the other hand, since about 2018, there has been a decrease in the price increase. With the Covid-19 crisis, the trend even seems to be reversing. Thus, the average price of a Bordeaux apartment has decreased slightly, by the order of 3% in 1 year. However, the reality remains different depending on the districts and cities of the metropolis. To get a better view of the evolution of the housing market,BORDEAUX Business spoke with Christian LOUIS-VICTOR. Professor atESPI Bordeaux and real estate expert, he brings a vision of real estate in the context of public policy.
How can this slowdown in house prices rise be explained?
Overall, realestate activity in the housing market had reached a peak, mainly in large urban areas. It is therefore not surprising that Bordeaux is one of them, after the crazy surge in prices observed in recent years.
In terms of buyer behaviour, thereis a departure from the very large conurbations to the benefit of the outlying cities. This goes even further because the populations are spread over the whole of France. We were already witnessing this phenomenon before the crisis but with thecontainment and the generalization of telework,it has become clear. We now have Parisians who go to work in Nantes but prefer to live in La Baule.
It’s also related to theimprovement of equipment throughout the territory. From now on, we are no longer forced to live in the city to ensure quality services. People are looking for a different quality of life so inevitably it impacts the real estate market. As a result, we are witnessing theinflux of people into medium-sized cities.
I think there is another factor to consider in the housing market. In the last municipal elections, there were changes at the head of the cities, especially with the arrival of the green movement. Which has slowed or stopped real estate transactions, or redirected some projects. In fact, they are more in favour of renovating the real estate parks in the city centres than in the construction of new neighbourhoods. Inevitably, this pushes to rethink real estate and therefore its value.
Is this finding in the housing market valid for all neighbourhoods? All the cities in the metropolis?
The reduction in fares is not necessarily valid on all cities of Bordeaux Metropole. Price growth in Bordeaux has stopped. But it makes sense because we had reached a climax. This is not necessarily the case in the peripheral cities of Bordeaux that continue to develop, or even in thehyper-centre of Bordeaux.
Has the health crisis affected the real estate market?
In general, the health crisis generates anxiety and uncertainty, particularly related to the loss of jobs. Therefore, regardless of the area, these arguments make the pencils ofthe price increase in the housing market.
In fact, it is not easy to know whether it is justified or not. When you look at the numbers on conventional influenza, there are more than 35,000 deaths each year. With the Covid, we lack precision which creates a global malaise. For most people, now is not the time to make acquisitions.
On top of that, what households have been waiting for for some time is to be able to finance the renovation,rehabilitation, standardization of their housing. Today, we are looking to re-develop the individual habitat. Which was no longer very fashionable with the city centers and buildings.
We are witnessing a new aspiration for a greener, more qualitative life. A life with less barrier between the outdoor environment and life inside. Real estate must seek to lift walls, open up to nature.
What is the future of the housing market in Bordeaux?
To really know that, we would have to ask the new elected officials.
What is certain is that Bordeaux is limited in terms of surface area. It is the outlying cities that must ensure the quantitative development of housing. In my opinion, we must first of all have a qualitative reflection of the existing habitat on Bordeaux itself. This goes hand in hand with the urbanization policy, which includes greening Bordeaux.
We are looking for a more acceptable environmental policy from the point of view of facilities, for a healthy life. In this context, real estate has its place at the table.
In terms ofrental real estate,it is absolutely necessary that it develop qualitatively whether in the city or on the outskirts. Many young people enter the labour market and need rentals because they do not yet have the opportunity to invest. Whether for financial reasons or for the need for flexibility. Anyway, it seems absolutely necessary toimprove the rental. And this, including at the surface level. Which ones are getting smaller and smaller.
We also need to think about rental housing for populations from immigrant backgrounds, for example. You don’t move a city forward if you can’t house the people there.
It is therefore urgent to develop a quality rental habitat even for those who do not have the means beyond the middle line. For me, this is where the future of urban housing lies, including in Bordeaux.
Is the city still attractive in real estate?
The Bordeaux metropolis is always attractive for its quality of life. It comes from its culture, the dynamism of the city centre, employment… There is always a strong attraction to the city centre for anyone who wants to be at the heart.
For the rest, this is especially at the level of local authority managers who should be instead of a more balanced policy. We are in a period of behavioural change, especially for all the people who live in the city. Including in companies.
For the past year, we’ve been working remotely. Therefore, local politicians must ask themselves what real estate policy to implement in the city, on the periphery, in the large conurbations. Housing will be at the heart of political thinking and urban managers.
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