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Excluded Capital
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EXCLUSIVE – Capital reveals the income that a household must earn to acquire an 80 square meter apartment in around fifty French cities. In certain municipalities, more than 9 out of 10 inhabitants cannot afford it
Can you afford to become a homeowner in your city? Wüest Partner provides some answers to this question in a study revealed exclusively by Capital. The Swiss real estate consulting and services company estimates that only around 30% of French households have sufficient income to purchase housing. The study specifies that a household must earn on average 48,000 euros net per year nationally to be able to buy an apartment under current market conditions. “Real estate prices have grown faster than household incomes over the past 20 years., underlines Corinne Dubois, economist at Wüest Partner. Result : “If the share of households owning their main residence continued to grow from 1980 to 2010, it has since stabilized.”
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To determine the proportion of French people who can afford to buy housing in their city of residence, Wüest Partner calculated the minimum net annual income necessary to be able to take out a property loan sufficient to acquire an apartment of 80 square meters. The estimate was made based on the principle that the household takes out a loan spread over 25 years (rate of 4.1%), with a debt ratio of 35% and a contribution corresponding to 20% of the price of the property. Wüest Partner then compared the income needed to buy a property in each city to the median income (half of the inhabitants earn more, the other half less) observed in these same municipalities. Finally, the study also mentions the share of households who are able to acquire an apartment in each municipality.
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Unsurprisingly, the study reveals that you must have a very comfortable income to hope to buy a property in Parisprix imm. A household must in fact earn 124,000 euros net per year to afford an 80 square meter apartment in the capital. The share of Parisian households whose income is high enough to buy a property is even less than 10%. This is also the case in cities where real estate prices are high, such as Montreuil (Seine-Saint-Denis), Boulogne-Billancourt (Hauts-de-Seine), Nice or Antibes (Alpes-Maritimes). Conversely, in Saint-Etienne (Loire) and Mulhouse (Haut-Rhin), where the median annual household income amounts to 29,700 euros and 27,300 euros respectively, more than 80% of households have the possibility of acquire an apartment of 80 square meters.
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Affordable prices in 70% of the territory
Note that the financial accessibility of property differs considerably between departments. In 70% of French territory, apartment prices remain affordable for a household with a median income in their city. But the areas where property prices are the highest are also the most densely populated, which explains why most French households are unable to buy property. In addition, the surge in credit rates over the past two years has considerably undermined the real estate purchasing power of households, which further complicates access to property, particularly in large cities.
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