Paris real estate market: is it a good time to buy?
If you are looking for your home in Paris, you are probably wondering if it is the right time to make your purchase on the Parisian real estate market. In this article, we are going to take a close look at the key factors in order to help you make an informed decision.
Paris real estate market: what are the key factors?
Stability of the real estate market: the Parisian real estate market is one of the strongest and most resilient real estate markets. Despite economic fluctuations and current inflation, Paris maintains strong and constant demand due to its attractiveness as a leading economic and cultural center. However, supply and demand fluctuate and affect selling prices. It is therefore important to take the time to get information or to be accompanied by a real estate expert to buy at the right price.
- The rise in mortgage interest rates: this is one of the essential factors. Over the past 2 years, buyers have noticed that mortgage rates have increased in France. However, they remain affordable and their costs are offset by a slight drop in average prices on the Paris Region real estate market.
Good to know: in 2023, we went back to the average mortgage rates that were in place in 2014. - Availability of supply: the Parisian real estate market is characterized by a limited supply compared to demand. Indeed, there are more potential buyers in the capital than owners ready to sell their house! Even at a time when the real estate market is not very active, quality apartments remain difficult to find. Real estate can be sold quickly and at competitive prices. Be ready to act quickly when an opportunity arises and make sure you clearly define your search criteria to target properties that match your needs.
Good to know: in 2023, the level of negotiations obtained by buyers increased over the last 2 years. Take your time to assess how much you are going to be able to get a price cut. Negotiations of more than 5% of the displayed price are frequent. However, apartments with many qualities (luminosity, calm, view, sought-after neighborhood...) can be sold very quickly and at high prices. - Your personal situation: this is a point to discuss with your banker or mortgage broker. Consider your professional stability, long-term plans, and financial capacity. Make sure that buying an apartment fits your personal goals and is in line with your lifestyle and future plans.
- Development prospects: the Parisian real estate market is a long-term investment. While prices may fluctuate in the short term, real estate values tend to increase over the long term. As a homeowner, you will benefit from the stability of a primary residence, the possibility of customizing your home according to your tastes and the security of owning a tangible asset.
- Interest in buying your main residence: one of the main advantages for an individual of buying their main residence in Paris is the opportunity to build up long-term savings. Unlike renting, where monthly payments are spent without a return on investment, buying an apartment on the Parisian real estate market makes it possible to build up real estate assets that can increase in value over time. As the mortgage repayments are made, a portion of the capital is gradually repaid, allowing you to build up forced savings. In addition, if real estate prices increase, the value of your primary residence can also increase and contribute to the growth of your wealth.
- Exemption from tax on real estate capital gain for the main residence: another important advantage of buying a main residence in Paris is the exemption from tax on real estate capital gain when it is resold. In fact, if you sell your main residence, you are exempt from tax on the capital gain realized. This tax exemption is a significant financial advantage, as it allows you to make a significant gain in value on the sale of your main residence without having to pay part of it back to the tax authorities. This can represent a significant saving, especially in Paris where real estate prices can be high. However, it is important to note that this tax exemption on real estate capital gains applies specifically to the main residence and does not concern real estate intended for rental or other purposes. Therefore, if you buy an apartment in Paris in order to rent it, you will not be able to benefit from this tax exemption when it is resold.
- A sense of security: buying an apartment to make it your main residence offers a feeling of stability and security. You are guaranteed to have a roof over your head, which can be emotionally reassuring.
Paris real estate market: what to remember
Buying an apartment in Paris, in the capital, is a major decision that deserves careful consideration. By assessing market stability, interest rates, available supply, and your personal circumstances, you will be able to determine if now is the right time to get started. Do not hesitate to be accompanied by real estate professionals to guide you in this process and make an informed decision.
Do you need help looking for an apartment in the Parisian real estate market? Call on our agency Parlemoi de Paris, we would be delighted to support you in your project and give you advice!
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