Paris overvalued?

The editorial of Jean-Marc Vittori of the French newspaper Les Echos of November 30, 2018, allows us to come back to the topic of real estate in France where prices are still blazing (except in the provinces) to such extent that The Economist has just placed Paris in the top three cities where the overvaluation of real estate prices in relation to income is the strongest. But sellers are at the party since buyers are able to borrow at particularly low rates, which suggests difficult repayments if their income continues to not increase in the coming years … But, as stated in his weekly letter, Marc Touati, economist and Founding President of ACDEFI, « as long as bond interest rates remain low, there is no danger in the house« . However, it anticipates a contraction as soon as bond and mortgage rates come up in France, which would weigh on loans and real estate prices. « The past correction, prices will rise gradually. Real estate will therefore remain a medium-term investment. With a flat: the excess taxation that weighs on French real estate investments will continue to act as a foil and promote tax exodus.

At Didier Maurin Finance, we would rather favor international property investment!