Become an owner or stay a tenant? This question is becoming increasingly debated as property prices and interest rates remain relatively high. According to a study carried out by Wüest Partner France and accepted by the company Le Figaro this Thursday, December 21, renting is often more profitable than buying in the ten largest French cities. However, this trend varies depending on the metropolis.
For example, in Paris, the owner’s annual costs for an apartment of 65 square meters are 37,500 euros, which is 7,800 euros more than for a tenant for the same accommodation. Property costs include notary fees, property tax, borrower’s insurance, debt interest costs, co-ownership fees, etc. In other large cities such as Lille, Marseille and Strasbourg, the difference between the cost of renting and buying is even. In the Phocaean city, slight year-on-year increase in the value of housing by 0.6% per year would be enough to make the purchase more interesting. Despite the high property tax, the price of the apartment is relatively low, which makes ownership easier.
Southern metropolis more favorable for tenants
On the other hand, in cities like Montpellier, Nice and Bordeaux, buying is less advantageous than renting. In Bordeaux, the high purchase price and expensive property tax make it less profitable. In these cities, buying is only interesting if the value of housing increases at least 0.5% to 1.5% per year for a period of twenty years.
Outside of the big cities, it is generally more profitable to buy than to rent. In around 80% of French municipalities, the annual cost of buying a home is lower than the cost of renting. In some departments, a future annual devaluation of 3% would not impede the financial profitability of property ownership. These departments are mainly located in the north-east and in the center of France, where real estate prices are increasingly affordable.