The housing market is a three-speed

The housing markets offer prospects of capital gains and profitability varied in the Hexagon. Cue Points.

What's more solid than the stone ? It has always the preference of the French. While household net wealth exceeded 11 000 billion euros at the end of 2016 (source : Insee), it was composed of 60% real estate. If all of our countrymen are not owners, 62.7% of households in france have at least one property : almost 59% have acquired their main residence, while 18% have at least one other unit, for example a rental property or a secondary residence. The homeownership rate increases at the discretion of the installation steps in life, with income and with age : almost half of the 30-39 year olds have as their main residence, two-thirds of couples with children (68.8%) and almost three-quarters of the more than 65 years of age (73,1%).

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Among the 25% of French the most affluent, there are more 8 owners in 10 (81,5%). Real estate is the essential heritage of those that do, representing nearly 75% of the wealth of the owners of 30 to 39 years of age, and around 63% in the oldest age group. But looking more closely, the differences are huge. The heritage median gross owners is 272 000 euros (before the deduction of loans to repay). This means that more than half of the owners, and lower for the other half. Real estate represents 64.3 per cent of this heritage, to a median value of approximately € 175 000. Even if the prices have changed since the last survey by Insee on income and household wealth in 2015, the stone has experienced various fortunes.

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"Observe the national average prices lack of meaning, recalls Nicolas Pécourt, communications director of the Credit foncier. The reality is that there is a market at several speeds !"

Paris, like London, is an exception in Europe

Ten years after the peak in real estate prices, the former in France, at the end of 2007, the general index Notaires-Insee all goods and locations combined, showed an increase of about 1.5% at the beginning of 2018. But the contrast is striking between several large families of localizations. In Paris, where prices were already much higher ten years ago than in the rest of france, they have continued to skyrocket to 42% in ten years. With an average price in excess of 9 000 euros per square metre, and more than 10 000 in many districts of the capital, the gap has widened compared to many of the common, even to the borders of the Ile-de-France, where you can find accommodation at less than 1 000 euros per square metre. "Paris and London are two exceptions in Europe, where more than a fifth of the country's population is concentrated in the capital, which is not the case in Germany, Italy or Spain. There, the weight of the main cities is more balanced," explains Nicolas Pécourt.

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Ten years of real estate in France

Source: Notaires-INSEE indexes

The Express

The second family includes the major metropolitan areas in the most dynamic and the little crown of the parisian suburbs. "We are witnessing the phenomena of metropolisation very strong, especially around Toulouse, Bordeaux or Nantes," continued the expert of Crédit foncier. It is also the case of Lyon, Lille or Rennes, in particular. In the paris suburbs, the prices have increased by 13.5% on average over ten years in the bordering departments (Hauts-de-Seine, Seine-Saint-Denis, Val-de-Marne), but with gaps between the apartments (+18%) and houses (+3.2 per cent), and a contrast of East-West (+6% in Seine-Saint-Denis, but +19% in the Hauts-de-Seine). In the whole of the Ile-de-France, outside Paris, prices have increased by only 5.5% in ten years, on average, with large differences between the near and distant suburbs, depending on the proximity of transport and types of goods.

The puzzle of the resale price, and cost-effectiveness rental

In the rest of France, outside built-up areas of the most dynamic and places of resort of the most chic, the prices have not recovered to their peak of ten years ago. In the province, beginning in 2018, the dwellings were sold on average 4.3% less than at their peak in early 2008, according to the index Notaires-Insee, and even in the decline of 5.1% for houses.

For investors, these peculiarities proved to be a double-edged sword. The price spike encourages more capital gains on the resale, but penalizes the profitability of rental in Paris. In the province, it is the opposite. The prospects for capital gains are lower, but the moderation in prices helps you buy in the best conditions of profitability.

rents are the second criterion of assessment of a property, whether for rent or live in. In the first case, the level of rent compared to the price determines the profitability of gross leaseable (before charges and tax). In the second case, the higher the rents are high compared to the purchase price, plus the purchase provides an economy of rent large compared to the rental.

The discrepancies in rents remain high in places. In the paris region, the apartments are rented between 14 € per square metre per month in the large crown, 17 € the m2 in a small crown, and 23 € in Paris, according to the Observatory of rents the parisian agglomeration (Olap). In the provinces, we can count between 9 and 12 € per square metre per month in the major cities, but rather 5 to 7 € in their suburbs or in the towns of less than 10,000 inhabitants. Given the moderation of the purchase price, the areas with the least strained, where rents are lower, are paradoxically the best returns. While the profitability in gross, before expenses and taxes, but that approach hardly 3% in Paris, it is in average around 4.4% in small crown, 5.6% in great crown, around 6% in the large cities of the province (zone B1) and up to 8% or more by province (zones B2 and C). On the flip side, it is also in areas in the least strained that there are more rental vacancies and difficulties of resale...

3 questions to Stéphanie Collot, directrice du Salon national de l immobilier

Express : who is the Lounge area of real estate ?

Stéphanie Collot : real estate affects everyone, both the young couples, first-time buyers, seniors who are looking for a second home or are planning to relocate abroad, and investors wishing to receive additional income for retirement and then pass on a heritage. It is the safe haven par excellence, solid and reassuring. Just as, in 2017, the property will remain an investment favorite of the French, for 2018.

What are the questions to ask ?

Should he make his first purchase to acquire his principal residence or carry out a rental investment ? Invest in the new or the old ? Rent empty or furnished ? What are the features of tax-exemption in real estate ? How to fund his first purchase and negotiate real estate credit ? Whether buying a property to live in or build wealth, it is necessary to take the time to focus its research and explore all possibilities of financing.

Read our complete file

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What answers are there to the living room real estate ?

The thousands of visitors expected at the Carrousel du Louvre, from 12 to 14 October, in Paris, will find a digest of information and interlocutors exhibitors, with free consultations of lawyers, notaries and bailiffs, or conferences designed and led by Henry Buzy-Cazaux, president of the Institute of management services real estate (IMSI).