Posted on 23 Dec. 2020 at 16:03
According to the latest study by the Reunion Real Estate Observatory on all transactions carried out between January 1 and June 30, 2020 by the 88 approved agencies, the heart of transactions in Reunion Island still focuses on properties that are below 150,000 euros (53% of sales).
The Observatory has also recorded a notable drop in the number of sales for three consecutive semesters: 2% over six months and 5% over one year. This drop is even more significant for transactions below 200,000 euros (-2% in six months and -8% in one year). Conversely, sales of goods over 200,000 increased, especially those over 300,000 euros (+ 2.5% in six months and + 6% in one year).
Insufficient supply
With the exception of the segment of apartments coming out of tax exemption located off the west coast, the level of real estate supply in Réunion, structurally insufficient, has continued to weaken since March. Especially in the southern region.
In fact, the first deconfinement caused a shopping spree, according to the Reunion Real Estate Observatory. Acquisition requests thus reached an all-time high in May, topped by a new high in June and then almost equaled in July.
Price increase ?
Taking this trend into account, “It is possible that some of the seller owners are tempted to raise their financial claims”, we note at the Observatory. Especially since due to the health crisis, the government wants to relax the rules for granting loans from next January. The effort rate, which corresponds to the share of monthly payments in relation to household income, should thus drop from 33% to 35% and the duration of loans should also be extended from 25 years to 27 years under certain conditions. Finally, banks should also be able to accept a higher percentage of non-standard cases, going from 15% to 20% in order to help first-time buyers.
The Reunion Real Estate Observatory nevertheless remains very cautious and recalls that given an unpredictable health context, “It is very difficult to anticipate the evolution of the market over the coming months”.
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