Why it is becoming more and more interesting to buy your home rather than rent it

Fall in mortgage rates, decline in housing prices… The current situation resolves the eternal debate between the respective advantages of ownership and rental.

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Positive signals are piling up on the real estate front. Prices of existing housing have fallen significantly over the last twelve months, particularly in large cities, and credit rates continue to fall,. According to the Se Loger / Meilleurs Agents real estate price barometer, published at the beginning of October, the period from which it is more interesting to buy a property than to rent it has been almost halved since September 2023. The Se Loger scientific team estimates that in view of current prices and on the basis of the average credit rate in force in October, six years and one month are sufficient on average for a first-time buyer to make the acquisition of a property profitable. A accommodation in France. For comparison, a year ago, this average amortization period was 11 years and 8 months for first-time buyers.

To arrive at this observation, Se Loger started from the hypothesis that a first-time buyer, who has a personal contribution of 60,000 euros, takes out a loan spread over 25 years, at the rate of 3.80%. This is in order to buy a property of 50 square meters, at the average price in force in France in October 2024 in all municipalities combined, at namely 3,065 euros per square meter. Then, Se Loger took into account a multitude of macroeconomic factors, to estimate from what period it becomes more interesting to buy this property rather than rent it. Data scientists have notably made assumptions about future developments in the economy, namely the evolution of real estate prices, rents and inflation, which affects buyers’ recurring spending.

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Predictions were also made on borrowing rates, in order to take into account a possible renegotiation of real estate credit once credit rates are at least 1% lower than the current rate. In addition, Se Loger took into account the unavoidable costs that a buyer must face, such as notary fees or property tax, in order to estimate the depreciation period of the property.

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“If the profitability horizon of a real estate purchase has been significantly shortened nationally in the space of a year, this is also the case in large metropolises», rejoices Thomas Lefebvre, vice-president of data at Se Loger et Meilleurs Agents. Of the eleven largest cities in France, eight make it possible to make an acquisition profitable in less than eight years. It is in Montpellier that it is most interesting to buy a property rather than rent it, with a depreciation period of only 5 years and 10 months, compared to 12 years and nine months in September 2023. Lille (6 years and two months) and Marseille (6 years and 4 months) complete the podium of large cities where housing depreciation periods are the shortest.

And good news for buyers, the situation should continue to improve in the coming months. “The dynamics of prices, rates, supply and demand suggest that the market will do better in the coming months, and that the investment will be even more profitable”concludes Thomas Lefebvre.