According to the Clameur and Le Figaro, an institute that analyses the French real estate rental market as the price of French real estate has gone up during the last decade rental returns have not.
In particular, since the beginning of the year 2014 French property rents have been stagnating or falling in major French cities, according to Clameur.
In addition, according to Gilbert Emont, researcher at l’Institut de l’épargne immobilière et foncière (IEIF) in France, between 2000 and 2010 the return on investment on real estate investments in major cities has gone down from 6 to 7 percent to now between 3 to 4 percent.
This lower return on French real estate was compensated until 2010 when investors were able to recover some of their lost investment return with an increase in profit from the sale of the French property.
However, with falling real estate prices at this time the gain on the sale is not necessarily still available.
In addition, the rent controls in the new French housing act (Loi Alur) that will take place in certain areas of France will also potentially reduce rental investment.
It is also possible that reduced rental returns come from reduced demand for rental properties since a certain number of renters are deciding the time is right to become owners.
If you are renting in France right now and you are curious as to what you can afford we can put you in touch with an English speaking French mortgage broker. Contact us here.
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Visit the Clameur site in French here Le Figaro Article in French here
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