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Summer 2020 market point

Show detail - Real estate agency Biarritz - Luxury houses and apartments Basque Country

A market under pressure

So far, so good. Very well even, concerning real estate in the Basque country and on the Landes coast.

What era are we living in ... After confinement that brought the whole of France to a standstill, we are leaving "almost" as before. It tested a new way of living for many of us, highlighting the importance of real estate in our daily lives, to live well at home.

If we can see in the economy a disconnection between the level of the stock market and that of the real economy, we also note the insolent health of the real estate market at the national level, as at the level of the Basque Coast. Which may seem surprising at first glance.

What should we remember from this last quarter of containment and the start of post-containment? 

This is nothing new, but we still see that the still low interest rates continue to facilitate this refocusing on real estate. After a sudden drop in requests, and logically a drop in new mandates and visits last March, we are seeing a resurgence of interest observed from May, amplified in June (see graph below from the site Barnes Côte Basque)

A certain nervousness in the real estate market with customers divided between the need to secure their assets in stone and the apprehension of buying in a market with already very high valuation. 

We explain this extraordinary health for several reasons: 

  • The desire to have a refuge in a healthy and protected place 
  • A catch-up effect to make up for the 2-month break 
  • The development of the use of teleworking makes it possible to take more advantage of your second home, well beyond the summer periods and long weekends in May. 
  • The desire to change one's life, and to move with one's family to our region, even if it means mixing teleworking and going back and forth to the place of economic interests.This makes it possible to prioritize the quality of life to the detriment of the frantic forward rush of the large metropolises. As proof, we receive 2.5 times more traffic to our website compared to the same period last year. 

So many customers are buying houses that were previously second homes ... but to move into primary homes. This transfer of primary residence, from Paris to the Basque Coast, therefore attracts an additional clientele, younger, still active, and arriving with a relatively large budget. 

The appeal of the countryside is confirmed, with customers looking for volumes, outdoor spaces and, ideally, an unobstructed view in perfect calm. The coastal market is not to be outdone, but sometimes fetch exorbitant prices (depending on the location and architectural qualities), which reinforces the attractiveness of houses in the nearby Basque countryside. This country market close to the coast is therefore far from being in crisis. 

Riding on this current frenzy, some sellers are playing with fire, and want to value their goods more than reason. Is it a risk or an opportunity? The market which continues to rise (it is still rising very slowly) feeds certain optimisms. But we prefer to advise a certain caution in our value advice, as in the marketing strategy that we give to our sellers. The de-correlation with the real economy may not last forever. The unprecedented recession in the global economy is no exception in France, and the social consequences are likely to weigh heavily in the balance, even if all the stimulus packages in each country hold up. 

The appetite for stone on the one hand, and the attraction of the Basque and Landes Coasts largely explain the dynamism of the real estate market in our region. This is all the more true for the luxury real estate market, an investment which traditionally resists crises better than average, and therefore remains a safe haven in these uncertain times. 

So far, so good. But for how long ? 

Philippe Thomine-Desmazures