Various underlying trends (age of the population, organisation of the French economy, distribution, and density of the population, new lifestyle habits) are prompting French households to consider moving home. These decisions are of prime interest to the public and private players involved in the housing market (throughout the value chain and the use of buildings). Drawing on its expertise in the study of public statistics, BDO Advisory has developed a model for forecasting population and household migrations, household revenues and housing needs to 2050 on a territorial scale. This model is described in this note.
Long-term socio-demographic changes are modifying migratory behaviour
Various fundamental changes are transforming the migration behaviour (within the territory) of French households:
- The ageing of the French population and the fall in the number of people per household (singlehood, separation, widowhood), as well as the rise of new generations, are changing the reasons for and destination of moves, as well as local housing demand.
- The sectoral reorganisation of the French economy is changing the geography of employment areas. While a policy of reindustrialisation is being considered, the development of business and personal services and the emergence of new industrial centres, combined with the impact of new technologies, continue to generate a redistribution of jobs and professional qualifications across the country. Since 2015, the NOTRé law (7th August 2015) and major projects (Métropole du Grand Paris, Olympic Games) have reinforced the effects of urban development (“Métropolisation”) on a regional scale, creating suction pumps for jobs and infrastructure.
- Overcrowding is holding back demographic development in some areas. while some areas are becoming attractive because of the dynamic nature of jobs, services and even climate, they are still subject to high inflation in housing prices due to the scarcity of land and rising construction costs, creating crowding-out effects (the purchasing power of first-time buyers has fallen by 30% since 2000 in France) and a need for housing that is out of step with the supply available.
- Post-globalisation syndromes. On a broader scale, French society is affected by new forms of mobility (electrification, multi-modality, etc.), new working practices (remote working), and a relocation logic resulting from global reorganisation and society’s awareness of sustainable development, all of which have local consequences.
Taking these various factors into account, BDO has developed an original method for forecasting the need for housing in the region to 2050
Forecasting population movements
BDO advisory’s approach focuses on population and household demographics over the long term. The population trajectories are based on INSEE’s demographic studies using a zoning system that we have specifically defined, which enables us to produce indicators at the EPCI level (EPCI were defined by the NOTRé law as a key territorial unit, there are based on local authorities boundaries, there are 1380 EPCI segmenting 96 departments (departmental and national grids are also available). The latest 2019 and 2020 censuses have been considered to establish the most recent starting point possible. We have selected three scenarios (low, central, high) up to a horizon of 2050.
For example, the map below shows population movements between 2040 and 2050.
“Three key trends emerge: (1) The national population begins to decline after 2040, (2) Suburban areas continue to attract …, (3) … to the detriment of major cities”
BDO Advisory’s model forecasts the need for housing at EPCI level in 2050 based on population movement forecasts
Definition
The potential housing need (delivery) represents the flow of new housing likely to result from demographic changes (estimate of the evolution of the number of new households) and changes in the housing stock (estimate of the evolution of the number of secondary dwellings, vacant dwellings and housing demolitions/restructuring). It does not include the need for housing to remedy inadequate housing or no housing at all situations. This concept should be distinguished from new housing production, which is subject to economic, political and environmental conditions as well as demographic factors.
Use and calculation
The potential housing need is expressed in the model developed by BDO Advisory by each component of this need. Formally, the calculation is as follows:
\[ LN = \Delta MEN + \Delta \frac{RS}{LO} + \Delta LV + S \]
- LN: new housing deliveries (ordinary housing + residential housing)
- MEN: number of households (= number of main residences)
- RS/LO: number of second homes/occasional dwellings
- LV: vacant housing stock
- S: net balance of vacancies (demolitions and other)
For main residences, this calculation can be used to project the type of dwelling (individual dwelling, collective dwelling, grouped individual house, etc.). This tool can become a real decision-making aid for investment (infrastructure, road and transport, public policy, utilities, bank agencies, etc.) and the development of new services.
