French Real Estate
Foreigners love Paris…
That’s why Paris Real Estate just broke a new historical record.
If there is a real estate depression in United States, but also in European countries like Greece, Spain and Ireland, French real estate market is still trading at high price, for several reasons:
- Building new constructions in France is not easy, it requires a lot of administrative approvals, and for example in Paris you cannot just build high buildings without urban services approval.
- French banks have always been cautious in lending money for buying real estate. Most of buyers had to have a debt income ratio below 33%.
- French law is very protective for buyers, French and Foreigners have the same rights, thats why foreign people like investing in France, where life quality is still great.
Housing Market Overvalued
But with 3-4% yields, from which you have to deduct many costs and taxes, it appears to me that French Housing Real Estate is overvalued now, and that it might start to decline.
Paris is at historical new highs, and price have increased much more quickly than rents.
A decline would be logical, even though with financial crisis, real estate is considered as a safe protection.
Professional Real Estate Market
But if an investor doesn’t want to take the risk to invest in an over valued market, he should consider investing in French professional real estate, which offers much better yields.