INFO EUROPE 1 – Rent or buy? It takes longer and longer to make your property profitable

This is a question that continues to divide the French. Should you buy or rent your property? Obvious for some, more difficult to quantify for others, the purchase of a home remains an essential step for many. However, with the rise in interest rates, buyers have to keep their homes longer and longer to make it profitable.

This is underlined by a new study by for Europe 1 and The Parisian. If in 2021, for a 70m2, the acquisition was profitable after five years and eight months, it now takes in 2022, 13 years and eight months to make its property profitable. This is more than double the original length compared to last year.

A trend that is happening everywhere

“If you have real estate prices that are increasing, rates that are increasing and rents that are not changing, inevitably, acquiring a property will take more time to make it profitable”, explains the spokesperson for Meilleurtaux, Mael Bernier.

And this trend is confirmed everywhere, and particularly in certain cities. In Angers, it is now necessary to remain owner 28 years so that that is profitable, against only ten years last year. In Marseille, the increase is even more striking. The study reveals that you have to own your property for 20 years for the purchase to be profitable, compared to less than four years in 2021.

The Covid and TGV boost the market

This price increase can be explained by two reasons: the Covid, which developed teleworking, and the TGV, which shortened travel times. “All the cities which are globally linked by a TGV between them are cities which have been boosted by the Covid”, insists MaĆ«l Bernier. And to emphasize that “in Marseille or in all the cities of the South, you have an additional advantage, it is the sun. This is not necessarily the case in the west all the time”.

Unfortunately for potential future buyers, obtaining a home loan has become much more complicated this year. Nearly one out of two loan requests is now refused by banks.

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