Summary :
An uneven recovery in the French real estate market
Since the summer of 2024, the French real estate market has shown signs of recovery. In fact, sales increased by 5% in the third quarter compared to the previous year. At the same time, stocks of available goods also increased, with an increase of 10%.
This dynamic mainly benefits first- and second-time buyers, made solvent by the drop in interest rates and an easing of banking conditions. However, this recovery leaves rental investors on the sidelines.
According to Brice Cardi, president of L’Adresse, “investors are still absent, although the French persist in investing intentions”.
The study carried out by the Address with OpinionWay indicates that only 20% of French people are considering a property purchase in the next two yearsa third of which is for rental use. This imbalance highlights the obstacles to rental investment that block taking action.
The motivations of the French for rental investment
A desire for income and wealth
For 27% of potential investors, rental investment represents above all a means of generating stable monthly income.
Brice Cardi underlines that “the main driver of rental investment for the French remains the regular income it provides, but also the creation of a secure asset”.
In times of financial market volatility, real estate remains a stable investment, appreciated by 19% of respondents for its security. In addition, building up transferable assets motivates 20% of respondents. This demonstrates the importance given to transmission in French investment culture.
An attraction for tax exemption, but in moderation
Tax exemption schemes, such as the Pinel law, play a minor role in investment decisions. Only 12% of respondents cite tax exemption as the main motivation, a figure which however rises to 23% among existing landlords.
“tax exemption remains attractive for some, but it is not the main lever of commitment for the majority of French people”, according to Brice Cardi. It would therefore be relevant to strengthen tax measures to attract new investors.
The main obstacles to rental investment in France
Price of goods and profitability
The cost of real estate remains a major obstacle. Since 42% of French people perceive high purchase prices as an obstacle to rental investment. This directly affects the profitability of their project. These high costs pose an even bigger problem for younger investors. Because they strongly depend on the accessibility of real estate loans. In fact, 31% of those under 35 say that current interest rates are holding back their intention to invest.
Risks of unpaid rent and squats
In addition to prices, the risk of unpaid rent represents another obstacle to rental investment, cited by 39% of respondents.
As Brice Cardi points out, “the fear of unpaid rent is such that some owners prefer to leave their homes vacant, thus aggravating the shortage of properties available on the rental market”.
Squatting risks also add to the lack of investor confidence. And this, despite recent legislative reforms to accelerate the expulsion of squatters.
Taxation and additional costs
Tax pressure, and more particularly the increase in property taxes, constitutes a barrier for many investors. In fact, 33% of respondents identify this burden as a major obstacle. Note that certain French cities have increased property tax up to 7% in 2024. However, this increase weighs heavily on profitability. In addition, energy renovation costs are another obstacle. Thus, 26% of respondents are concerned about regulations which require costly upgrades, especially for goods classified as energy-intensive.
Investors’ expectations of the government
Protecting landlords against unpaid rent
Investors primarily expect guarantees against unpaid rent (55% of respondents). The guarantee against unpaid debts is seen as an essential security factor.
Brice Cardi indicates that “public authorities could better protect landlords, in particular by facilitating rapid compensation for unpaid rent, which would restore confidence to investors”.
Reduce taxes and reduce tax burdens
Reducing property taxes is another strong expectation, cited by 39% of respondents. This is followed by the request for tax relief on rents for 30% of investors. Thus, one in four respondents also hope for a relaxation of credit criteria. Which would help to stimulate rental investment in France.
Protection solutions for investors offered by Address
To address the obstacles to rental investment and reassure investors, the real estate network l’Adresse has launched “l’Adresse Assure”, an insurance offer intended for landlords. This guarantee covers up to €100,000 of unpaid rent with no time limit, as well as property damage costs up to €20,000.
“We are proud to provide owners with reinsurance solutions that allow them to secure their rental income and minimize their risks,” declares Brice Cardi.
The Address Unpaid Rent Guarantee also includes anti-squat coverage that is unique on the market. Since it covers up to €35,000 in rent in the event of illegal occupation. This type of guarantee, including elements of legal protection, could reduce apprehensions linked to rental investment.
