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Why don't you have to wait to invest in real estate?

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Why don't you have to wait to invest in real estate?

Investing in real estate means building wealth. Real estate is an active investment that meets many challenges.

According to a 2018 INSEE study, financial traditions follow one another, the French have confidence in stone and they are 58% to own it.

Investing in real estate is investing in sustainability, profitability and security. This can be to generate a monthly source of income (cash flow), build sustainable assets and set up self-financing or decide to receive a capital gain as part of the purchase-resale.

There are several reasons why you should not wait to invest in real estate:

1- Real estate prices are stabilizing and bank rates are at their lowest

The end of 2022 marked a stagnation or even a decline in real estate prices in metropolitan areas, despite the rising inflation. 

According to studies conducted by Best Agents at the national level and since the publication of the last barometer, prices have stagnated throughout France. Only rural areas are still doing well (+0.5% in November).

Crédit Logement CSA also saw an average (excluding insurance) of 1.14% for all durations, with a minimum of 0.90% over 15 years and a maximum of 1.27% over 25 years

The value of money is not the same as yesterday, and will not be the same tomorrow (i.e. €1,000.00 ten years ago does not have the same value as today).

4- Stone is a safe bet

Real estate investment makes it possible to build up lasting wealth (which can allow you to quietly prepare for retirement, protect your family from any vagaries of life, etc.), unless an incident occurs (i.e. degradation of the property), it is rare that real estate loses value and depreciates. The property does not suffer the variations and fluctuations of the stock market. Even under the health crisis (i.e. Covid-19 pandemic), real estate prices have not fallen. Reselling later can also allow you to benefit from the real estate capital gain

Overall, Paris is a safe bet in terms of rental investment or pied-à-terre. Variations in the price of real estate remain stable, with prices slightly increasing from year to year. The major economic crises of the last 30 years have not allowed the market to fall in the long run.

Nevertheless, apartments with defects in Paris have trouble selling or do not sell at all in times of crisis. Exceptional, rare, and flawless residences with high ceilings, a balcony/terrace with a view, or even gardens sell well and often at above-market prices. Properties that do not require work are more sought after and sell better than those that require renovations. As such, it's vital to evaluate the opportunity of a real estate purchase by quantifying the cost of the work without forgetting to take into account the cost of notary fees in the purchase of an apartment in Paris.

2 - Invest in thermal strainers

Last January, the government announced the gradual disappearance of thermal screens from the rental market by 2023. The future law on climate and resilience, currently being examined by a special parliamentary committee, confirms this. F or G-rated (on DPE) apartments will no longer be available for rent by 2028.  

These thermal strainers, which saturate the market, are a real opportunity. The price of these energy-intensive properties (usually old) will decrease by 15%. By embarking on a rental investment, you will be able to benefit from many aids, especially in energy performance (i.e. MaPrimRenov').

3 - Always more help (especially if it's your first real estate purchase)

When you invest in real estate, you can also benefit from various financial aids available in France. They include:
  • The Zero-Rate Loan (PTZ)
  • The PTZ is an interest-free loan. It is granted to buy or build a home in addition to another loan. It is common to use this loan in new real estate or in carrying out repairs and renovations. It can finance up to 40% of the housing price capped at €130,000.00.

  • The Housing Action Loan (PAL)
  • This aid allows you to borrow between €7,000.00 and € 25,000.00 for a preferential rate between 0 and 1%.

  • The Social Accession Loan (PAS)
  • It can cover 100% of the operation, and you can complete it with your contribution, a PTZ, a home savings loan, a housing action loan, etc.

  • Local aid from the commune, department, or region

  • You can turn to the Censi-Bouvard Law 
  • Allows French taxpayers who make a real estate investment in a newly furnished property to directly reduce their tax by a percentage of the cost price of the apartment and recover the VAT on the amount of the investment.

  • The Cosse Device 
  • Tax incentive scheme that allows you to benefit from a deduction of property income from the rental of housing, provided that you have signed an agreement with Anah.

  • As an investor, the Pinel Law will also undergo some changes in 2023

Important Note: The Housing Tax will completely disappear in France by 2023! 
Ce qu’il faut retenir :
  • There's no better time to invest in real estate than now
  • Real estate investments are sustainable, profitable, and secure.
  • You can even benefit from financial aid in France when you invest in real estate

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