Market point summer 2019

After an exceptional year 2018, both in terms of the increase in the number of transactions and the appreciation of selling prices, 2019 was awaited with many questions. The first semester gives us the first answers.

The dynamism of sales in coastal towns in recent quarters continues to create a certain shortage of quality properties, and puts pressure on the balance of the real estate market. As a result, we are seeing across the Basque Coast both a slight increase in the number of transactions *, as well as a moderate increase in prices (3 to 5% depending on the location). The scarcity of goods is such that towns like Saint-Jean-de-Luz and Ciboure experience a scissors effect with a drop in the number of sales (non-existent choice) which is very partially offset by the moderate rise in prices **

This tightening of the real estate market has several consequences:

• A postponement of the purchase project, pending (hoping) for a stabilization of the market, and more choice in this narrow market
• Unsold goods (too high price or more or less inconvenient defect) manage to find a taker
• Some owners, who were not really sellers, let themselves be tempted by tempting selling prices, and sell ... and very often find the same difficulties in relocating, and are forced to pay the full price, or to move away slightly from the coast.
• Increase in "off market" sales for tailor-made work with complete discretion
• In turn, the intense activity observed on the coast directly benefits the neighboring towns and villages that are not on the ocean (Bayonne, Arcangues, Arbonne, Ahetze, Ascain, etc.)
• These opportunities can whet the appetite ... of opportunists, who try to ride the market, without necessarily creating real material added value.
• The transparency on the knowledge of recent transactions allowed by Bercy and the support of a good real estate advisor nevertheless allow buyers to move forward (or not) knowingly.

This attractiveness of the Basque coast can be seen throughout the real estate market, old and new. Thus, real estate developers are going through a good period in which they manage to buy (expensive) land that is still virgin, or those that may contain a residence, and to pass this mechanical price increase without worry on to the prices of new real estate. The constraint of integrating social housing from a certain size remains the only problem: to co-exist in the same real estate complex of apartments at 8,000 € / m2, and others sold to social landlords at 2,500 € / m2 . The market is so tight flow, that this difficulty is overcome to succeed in this amazing big gap.

Ever-lower rates and a shortage of goods on the market can push for new record prices, but trees don't climb to the sky. The uncertainty over Brexit, trade and geopolitical tensions between the United States and the rest of the world are all reasons that make us bet on price stabilization for this year 2019.

The G7, which will take place in Biarritz from August 24 to 26, will hopefully offer good visibility both in the short and long term.

We wish you a beautiful summer, and hope to have the opportunity to see you during our summer openings (July 18 in Biarritz, August 8 in Saint-Jean-de-Luz).

Philippe Thomine-Desmazures

* according to the transfer fees collected by each municipality, published by the regional and territorial accounts fund

** source MeilleursAgents.com