Lodgis unveils its 2020 furnished rental barometer. If this year of health crisis necessarily impacted the real estate market, traditional furnished rentals have been able to reinvent themselves to succeed:
An Analysis from Alexis Alban, the Deputy General Director of Lodgis
“This was a year of firsts for our field. The unprecedented health crisis that we all experienced in 2020 has had a direct impact on the traditional furnished rental market. The most striking fact remains the unprecedented explosion of the supply. We were clearly affected by the crisis, but we are also delighted to have held firm by reaffirming our commitments: to support our clients, both our owners and our tenants, to be more than ever a trusted third party and a strategic support for them and to continue to prove our flexibility in the face of an ever-changing environment...”
Furnished tourist rentals were strongly impacted by the health crisis in 2020. To compensate for the absence of tourists in France and make their property at a minimum profitable, many owners have abandoned the Airbnb-type seasonal rental platforms to turn to traditional furnished rentals. At Lodgis, 30% of the requests received during the first confinement in 2020 concerned owners in this situation. The website PAP.fr also notes that “70% of owners who rented their property on collaborative platforms are now moving towards traditional furnished rentals”. The direct consequence of this new enthusiasm for traditional furnished rentals is that our supply of apartment options has exploded with twice as many properties available within 2 months on our site (on average over H2 2020).
In 2020, Lodgis noted an overall drop in rents for furnished Parisian apartments of -2.8%. At the same time, the rents for unfurnished properties increased throughout the year (+ 0.92% in the first quarter, + 0.66% in the second quarter and + 0.46% in the third quarter, according to the ANIL).
“Faced with this increased supply of furnished rental properties and an environment that has become much more competitive, Lodgis has decided to advise its owners to modernize their property (equipment, decoration, etc.), 'to be more flexible on the desired rental periods or to lower their rent in order to help them rent their properties again", explains Alexis Alban. "It is this latter strategy that has paid off during this crisis period: the majority of furnished properties offering a 5% to 10% rent reduction were rented within one month. Of course, these measures are temporary: rents should return to their 2019 level when the market has recovered, with the return of international students and professionals on the move”.
Another noteworthy fact concerns the type of stay: the proportion of rentals in primary residence exploded with + 7.6 points, or 37.4% of rentals (in 2019, primary residence rentals represented 27.2% of the total). Directly linked to the type of rental, the length of stay logically extends by 2 weeks on average. In 2020, leases of more than 12 months represented 32.8% of rentals, compared to 23.4% in 2019.
“Here again, everything is linked to the public health situation,” ", explains Alexis Alban. "In 2020 there was much less mobility and an almost total absence of international tenants. French citizens who settled in Paris did so as part of more sustainable projects (studies and professional projects). This is an opportunity for them to discover the traditional furnished rental market: unfurnished properties are rare while the traditional furnished rental has seen its supply increase considerably this year, at prices identical to those of unfurnished rental. The traditional furnished rental has become a real sustainable alternative for a good number of tenants in 2020”.
On the other hand, the reasons for stays and the types of property rented have not changed much: traveling professionals and students remain the majority of furnished rental tenants (48.8% and 38.7% respectively) and studios are the most rented properties (46.9%).
“The only notable difference is that student or professional mobility projects used to be thought out three or four months in advance, they are now organized month by month, a bit last minute, depending on confinements, travel restrictions, and announcements of closure and reopening of borders”, explains Alexis Alban.
Lodgis notes an increase in French tenants with +13.8 points in 2020. Logically, given the health context, nearly 50% of Parisian furnished tenants in 2020 were French (versus 35.9% in 2019).
There were decreases in the number of tenants of all other origins: - 6.6 points for the European Union, - 3.4 points for the United States and Canada, where the majority of tenants in traditional furnished rentals came from after France.
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