After a year 2019 which recorded a record activity with more than a million transactions, the real estate market in 2020 should keep the same fundamentals: attractive interest rates that boost the market, high housing needs in the face of an insufficient supply, a craze for stone as a preferred investment in a context of uncertainty linked to pensions. All this will keep the price increase – moderate – in the big cities. Although activity will fall slightly (price increase, more selective banks), the momentum will not be stopped. Here are some tips to follow:
Take advantage of consistently low interest rates
If you have a real estate project and are able to buy, the good news results in the borrowing conditions which must remain favorable. Mortgage interest rates are at historically low levels (1, 12 % on average for all durations combined according to the CSA Housing Credit Observatory).
For individuals, there is no significant noticeable rise on the horizon. Except for a major economic event, interest rates will remain very low at least the first months of 2020. Some economists, like Pierre Sabatier, even consider that the rates will remain at durably low levels for 10 years. That’s no reason to borrow with your eyes closed. Monitor the cost of your borrower insurance and all related costs related to your real estate project.
Loan: Be vigilant about the granting conditions
With the recommendations of HCSF, banks could be more selective. Stop granting loans beyond 25 years and ensure that the monthly loan payments do not exceed 33% revenues. At the start of the year, the riskiest borrowers in terms of health or the elderly are already penalized: wear rates for mortgages harden. Of 0, 15 % on average since January 1, 2020. The usury rate corresponds to the maximum rate at which a bank can grant a loan. This rate includes all costs: file, insurance, warranty and possible brokerage. Below the picture of the bank of France on the wear rate.
Use a broker
Whether as part of the project to acquire your main residence or to invest, do not hesitate to put your bank in competition to obtain the best borrowing conditions. Beyond the advice aspect, calling on a broker, specialist in real estate credit, should allow you to obtain the lowest rate and make savings. Illustration with Sandrine Allonier, spokesperson for You finance. There are also Cafpi, Meilleurtaux and Empruntis in particular.
Don’t count on lower prices
In Paris, Ile-de-France and the regions, the rise in housing prices will continue in 2020. According to the notaries of France: “The trend observed from the leading indicators anticipates a rise in prices over one year for all of the large municipalities in France with the exception of Toulon, Grenoble and Reims where the trend is towards stabilization of price. “
A large majority of real estate professionals anticipate a moderate rise in prices in 2020 in the big cities. Between 1 and 2 % increase, according to Laurent Vimont, president of Century 21.
The prices, the amounts, the sales times, the surface area, the price differences (the negotiation margin) presented during the annual press conference of the Century 21 network, on January 6, 2020.
In Paris and Ile-de-France, below is the more specific table of average prices per m2 in the departments, the acquisition amounts, the sales times, the average surface area.
Invest in promising sectors
After having screened fifty French cities using many criteria: price, economic dynamism, demographic, student population, disposable income … here are the ones where buying a home should be the most profitable in the medium term. The list of cities where to invest according to the study of Figaro Immobilier.
Bet on the development of Greater Paris
With the Grand Paris Express project, favor the municipalities whose station projects will see the light of day 2024, with the organization of the Olympic Games. Example with line 15 south which links Pont de Sèvres to Noisy Champs and whose works have started. Ideally, you should stay near these future stations, with a maximum distance of 800 meters. You have to have the big interconnections in mind.
Among the promising sectors and the preferred territories: Saint-Denis, Saint-Ouen, Villejuif, Le Bourget, Villiers-sur-Marne, Bagneux, Aubervilliers, Champigny, Clamart. These are municipalities with good prospects in terms of mobility and job creation and therefore housing needs. For the most patient: Orsay, Massy Palaiseau and the Saclay plateau. Stéphane Desquartiers, president of theinvestor’s house gives advice.
Seasonal rental, naked or furnished: the most profitable?
Seasonal tourist rental, LMP (professional furnished rental), LMNP (non-professional furnished rental) or more conventional bare rental, there are different formulas for renting your accommodation or offering an acquired property on the market in order to provide additional income or take advantage of it later, at retirement, for example. Philippe Crevel, president of the Cercle de l’Epargne, answers the question: what type of investment brings in the most?
Investing in LMNP (non-professional furnished rental) or seasonal, what is the right strategy? Maud Velter, rental specialist, responds on the occasion of Les Clés de l’Ummo.
Buy to invest in Denormandie in the old
The rental investment scheme in the former is named after the Minister of Housing: Denormandie. To help renovate degraded old properties in medium-sized cities, the state is appealing to private investors. So, if for example, you carry out work, up to 25 % of the cost of acquiring a house or apartment, then commit to renting out the property (for 6, 9 or 12 years), in return, you get a tax reduction on your income. On the occasion of the program Keys to real estate, Henry Buzy-Cazaux, president of the IMSI, explained the terms of Denormandie, the share of risks but also the sectors to be favored.
Buy to invest in Pinel in new
Extended to end 2021, the Pinel device is a rental investment in new buildings. With the same fundamentals as Denormandie (favor the location, ensure the vitality of the rental market …), it is aimed at owners who buy or build new housing in a tense area (A Bis, A and B1) and agree to hire it out for 6, 9 or 12 years. In return, they benefit from a tax reduction of 12, 18 or 21 %. Franck Vignaud, of the Real Estate Laboratory advises on the sectors to follow, best practices and pitfalls to avoid with Pinel.
Buy to invest in paper stone
And why not invest in a SCPI (civil society for real estate investment)? With yields that exceed 4 %, SCPIs have solid assets. They make it possible to invest in the rental without having management problems, this being entrusted to professionals. By holding shares, you can access the market for offices, shops, logistics centers for example. However, the paper stone should be used with care. Which investments should be favored? Jonathan Dhiver, founder of MeilleurSCPI.com gives advice in the Keys to the Real Estate.
Taxation: setting up an SCI
SCI: Civil real estate company. Three letters sometimes presented as magic letters that would solve many problems in terms of management and transmission of wealth, especially in family. In all cases, in order to be useful and effective, the SCI must meet the specific needs of each. Explanations from Maître Elodie Frémont, notary of Greater Paris on the occasion of the show Les Clés de l’arman.
Figaro Immo: follow our experts and our practical advice
You have a real estate project, follow us! Whether to provide answers to all your questions relating to law with our partners the notaries of Greater Paris, but also to enlighten you thanks to our investment experts, rental specialists, condominiums, new, old or international real estate without forgetting advice du Mot de L’immo … find all of Les Clés de l’Immo’s broadcasts on Figaro Immo. Resumption on Friday 17 January 2020. You can also participate or ask questions directly on our forum. Do not hesitate !
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