Buy or rent? Could the match be rocking? According to a study published on Tuesday, September 5 by the broker Meilleurtaux, making a real estate purchase profitable takes an average of 15 years and 6 months. That’s 2 years longer than in 2022 and 10 years longer than in 2021!
Should you buy your main residence, or stay a tenant? While mortgage rates now exceed 4% and make it difficult for many households to access borrowing, another piece of data published today by Meilleurtaux could make you want to stay a tenant. Indeed, making the purchase of your principal residence profitable takes more and more time.
The broker took the example of a purchase of a 70m2 property. On average, while it took about 5 years in 2021 and just over 13 years in 2022, a buyer today will put 15 years and six months on average to make its purchase profitable.
In 2019 it took less than 2 years to make your purchase profitable!
And the difference is even greater if we go back in time, explains Mal Bernier, director of communication at Meilleurtaux: Since 2021, the length of detention necessary to make the purchase of a principal residence profitable has continued to increase with a strengthening of the phenomenon since 2022; remember that in 2019 it took less than 2 years to make your purchase profitable! For more than a year we have been witnessing a significant rise in mortgage rates with prices continuing to rise slightly or holding steady. These two realities combined explain the lengthening of the period required for buying to become less expensive than renting.
Strong disparities depending on the city
However, not all borrowers are equal depending on the city in which the purchase was made. Thus, so-called secondary cities such as Perpignan, Le Mans or Aix-en-Provence see the period of profitability of a purchase soar. The latter has thus passed 10 years (compared to 2 years in 2022) Perpignan, 19 years (compared to 8 years in 2022) at Le Mans, or even 21.6 years (compared to 8 years in 2022) Aix-en-Provence.
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But other cities are experiencing the opposite phenomenon. Marseille, Lyon or Metz, the average time to make your purchase profitable drops significantly. Marseille, it now takes 13 years in 2023 to make its purchase profitable, compared to 20 years in 2022.
If these cities are doing well, it is simply due to a drop in real estate prices.
If these cities are doing well despite the current context, this is quite simply due to a drop in real estate prices. A city like Metz, the price for me dropped by almost 500 euros, explains Mal Bernier, before continuing: But these are also cities where rental prices have increased allowing owners to make a profit more quickly despite the rise in rates, the rental for an equivalent property having increased in parallel.
Finally, in other cities, the duration remains stable. This is the case for Rennes, where the owners will take 21 years to make a property purchased in 2023 profitable, compared to 20 years for those purchased in 2022.