Real estate market trends in 2019 France / Switzerland analysis

January 4, 2019

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Prices are rising, home loans are growing longer, markets are slowing down, but trust of investors in the stone is the trend of real estate markets in France and Switzerland for the year 2019.

In France: Rising prices but geographical disparities

In 2018, French real estate did not benefit from the announced drop in market prices. On the contrary, a majority of the larger cities have seen the price of their real estate rise.

The price index for new and old housing published by INSEE shows a rise in prices, especially for older dwellings. However, it is a question of remaining attentive to the strong geographical disparities present on the French territory: in Paris, the price increase is much stronger than at the national level. Prices jumped 41.5% in ten years.

While the price of stone should continue to increase, investment should continue the decline begin in the year 2018. Real estate remains however the preferred placement of the French, far ahead of the life insurance or the financial markets . The goal here is to build a wealth or to have additional income in case of rental investment.

To allow first-time buyers to buy, banks offer longer credits. More than one-third of home loans to new owners are for 25 to 30 years. Today, the average home loan in France is around 20 years.

In Switzerland: Several trends are to be taken into account for 2019

On the other side of the border, Swiss prices are constantly increasing.

Despite the construction of thousands of new homes in Geneva, the lack of property for sale will continue to cause a decline in investors to the canton of Vaud and neighboring France. Only 18.5% of Geneva residents own their homes, the remaining 81.5% are renters.

The weight of baby boomers will play an important role in the real estate trend of the coming years in Switzerland: due to the aging of the population, the main demographic group interested in big houses will multiply twice as fast as the population as a whole .

A phenomenon to be taken into account in 2019: the vacancy rate of rental apartments will explode, because of a bad balance between construction activity in Switzerland which has not increased in recent years, and the demand that has declined. The price of rents will be influenced. Prices for new leases and lease renewals will decline.

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