the Toulouse market is dynamic but close to a shortage (1/4)
“We hit the low point in 2021, in Toulouse“, does not hide Jean-Philippe Jarno, the general manager of the France and international subsidiaries of Bouygues Immobilier. “2021 is the worst year since the late 2000s“, adds the one who is also the director of L’Observer, an organization which brings together all the real estate developers present in the Pink City in order to draw up trends in the new real estate market in Toulouse.
To make such remarks, the leader relies on data concerning sales. They were 4,351 in number in 2021, in the Toulouse urban area (including just over 2,000 just for the city center). Stable compared to 2020, we have to go back to 2009 to find traces of such a performance on the territory of the fourth largest city in France. Even more strikingly, sales in Toulouse and its region are down -53% according to L’Observer compared to 2017, the high point of the market over the last decade with 9,300 sales.
Unsurprisingly, therefore, the stock situation”Bordering on shortage“, according to Jean-Philippe Jarno, with just over 3,600 properties for sale alone, at the end of 2021, in the Toulouse urban area. Only on the perimeter of the fourth largest city in France, new real estate is valued at a little more than 1,950, ie half of the total supply, which is not too much for a conurbation which prides itself on welcoming 15,000 additional inhabitants each year.
“It becomes a subject of attractiveness of the territory. But this situation is only the result of an accumulation of the difficulties that we encounter, on the issuance of building permits, etc…”, coldly analyzes the representative.
Buyers always there
Despite these tensions on the supply side, demand is still present in Toulouse. Proof of the “tension” that reigns on the new real estate market in Toulouse, 5,400 homes were sold in 2021 (half of them in the city center) still according to L’Observer, while for the record only 4,300 were marketed over the same period.
Although less important, resold sales of colors in Toulouse (Credits: L’Observer).
In this local market, which continues despite its recovery after the sudden stop reinforced by Covid-19, sales at controlled prices and reduced VAT are doing well in Toulouse. Although lower than before the health crisis, sales at controlled prices are linked by +35% compared to 2020, and this statistic rises to +42% if we add sales at reduced VAT. “In Toulouse, we have a lot of accommodation reserved for first-time buyers, which are very popular. It is also by far the most dynamic market segment still today.“, testifies Jean-Philippe Jarno. On sales to occupants, this type of property weighed for 42% of transactions in the year 2021.
Due to the development of these new products, accompanied by a smaller supply for sale of new T1-T2 and T3 real estate in Toulouse, the share of sales to investors has continued to decline in recent years, to the benefit of occupants. “A few years ago, we were at 80% of sales to investors over a year, which made Toulouse a city for real estate investors. From now on, we have the same ratios as other cities in France“, confirms the manager of the Bouygues Immobilier France subsidiary. Thus, sales to occupants increased by +20% in 2021 (compared to +10% for investors), making it possible to reach a ratio of 42% occupants compared to 58 % for investors Five years earlier, only 27% of sales were completed by occupants.
Rising prices
But this dynamism of the market, coupled with a reduction in stocks, is not without consequence on the average price per m2 in the Toulouse urban area. This reached 4,028 euros (excluding parking) at the end of 2021, an increase of +3.3% compared to 2020. The market specific to the city center is experiencing the same dynamic, with a continuous rise in the price per m2 on the last five years. It is thus 4,304 euros excluding parking.
Graph representing the upward trend in the average price per m2 of new real estate in the urban area of Toulouse (Credits: Observer).
“Despite the rise in prices, the fourth city in France remains cheaper than Aix-Marseille, Cannes, Nice, Montpellier, Bordeaux, Rennes or Nantes. In addition, Toulouse is at the same level as Strasbourg, only Lille is cheaper “, would like to underline in conclusion the president of L’Observer.
This article is the first in a four-part series. After an analysis of the new real estate market, the drafting of The gallery in Toulouse will offer an analysis of the local tertiary market (Tuesday), then logistics (Wednesday) before looking into the land and real estate policy of local authorities (Thursday).