28 July 2020

2020- n° 193

In July 2020, real estate developers’ opinion on demand for new dwellings is deteriorated compared to January Quaterly business survey in the real-estate development - July 2020

In July 2020, the real estate developers’ opinion on demand for new dwellings is more deteriorated than in January. The corresponding balance of opinion has moved below its long-term average.

In July 2020, the balance of opinion on the prospects for housing starts for the next three months is virtually stable compared to January and is still slightly above its long-term average.

In detail, the balance on housing starts for sale is virtually stable, whereas that on housing intended for rent is higher than in January, well above its long-term average.

It does not reflect necessarily that the prospects are higher than before the health crisis, but rather that a high proportion of firms consider that the housing starts for rent will progress in the next three month compared to a very low level during the lockdown.

At the same time, as many real estate developers as in January 2020 have indicated a fall in their unsold dwelling stocks. The corresponding balance stays slightly above its long-term average.

Real estate developers are a bit less numerous than in January to indicate a rise in the average price of new dwellings for sale. The corresponding balance of opinion is lower than in January but stays well above its long-term average. About funding, as many developers as in January have considered that downpayment to acquire a new dwelling has increased during the last three months: the corresponding balance is virtually stable and remains above its long-term average.

On the other hand, more developers than in January think that the financing capacity to purchase new housing will decrease over the next quarter. The corresponding balance of opinion stands far below its level of January: it stands slightly below its long-term average, while it had exceeded it largely from April 2019 to January 2020.