In a context of falling prices of old real estate in Île-de-France for two years, a crucial question arises for investors and owners. Are real estate capital gains still possible in the long term? An in-depth analysis of the data provided by Greater Paris notaries sheds nuanced light on this issue. Indeed, it reveals disparities between departments and types of property, but confirms the potential profitability of real estate investment over a decade.
Summary :
Short-term capital losses, long-term real estate capital gains
Short-term capital losses
The study of real estate transactions in Île-de-France highlights a dichotomy between short-term and long-term resales. The data reveals average capital losses of €40,600 for apartments and €39,200 for houses in the event of resale within two years. Thus, owners forced to resell their property quickly after acquisition have actually suffered losses. But this does not reflect the reality of long-term investors.
Longer holding periods, a guarantee of profitability
However, the average holding periods are 10 and 12 years respectively for apartments and houses. Which suggests more favorable prospects. Indeed, over these longer periods, real estate capital gains remain the norm, although variable depending on the departments and types of property.
Paris and Hauts-de-Seine: contrasting trends for apartments
Short-term price decline
Focusing on apartments, a trend clearly emerges. Over the last five years, the price per square meter has fallen by 1.7% in Île-de-France.. However, this drop has had direct repercussions on the value of property. In fact, it generated a average capital loss of €5,800 per apartment. However, this trend masks strong departmental disparities.
In Paris, where prices are particularly high, the drop was earlier and more marked. Since we observe a decline of 5.6% in 5 years, i.e. an average loss of €31,350 per property. Hauts-de-Seine also shows a slight loss of €3,720 over the same period. On the other hand, the other Ile-de-France departments remain in positive territory. And, real estate capital gains range from €5,000 in Seine-Saint-Denis to €11,700 in Yvelines.
Rising prices and long-term real estate capital gains
Over a period of 10 years, the price per m² of apartments in the Ile-de-France region increased by 14.1%. This generates an average capital gain of €44,080 per property resold. However, the price increase varies depending on the areas of Île-de-France. Thus, in the Greater Crown, the increase remains moderate with an increase of 6.7%. On the other hand, the Little Crown experienced a more marked increase of 13.5%.
Paris, for its part, clearly stands out. The capital is doing well with an impressive increase of 17.6%. This dynamic results in a average real estate capital gain of €78,100 for an apartment of 55 m².
Houses, safe havens for real estate capital gains
Better resistance to falling prices
Houses are showing greater resistance to falling prices. Unlike apartments, their resale after five years continues to generate capital gains in all departments of Île-de-France.
On average, this added value amounts to 18 600 €. However, disparities appear depending on the territories. In Seine-Saint-Denis, the average added value reached 13 800 €while in Hauts-de-Seine, it climbs up to 33 800 €. Indeed, the later rise in prices and the appeal of houses during COVID explain this good performance.
Significant long-term capital gains
Over 10 years, the capital gains are even greater, from €23,500 in Seine-et-Marne to €89,500 in Hauts-de-Seine. This performance can be explained by a later rise in prices than for apartments. This is stimulated by the strong attractiveness of this type of property during the COVID period.
Conclusion
Despite the recent drop in prices, real estate investment in Île-de-France remains potentially creating real estate capital gains over a period of 10 years. However, houses appear more resilient than apartments. Thus, we observe notable disparities between Paris, Hauts-de-Seine and the other departments. These lessons shed light on the strategies of investors, who must integrate temporality and location into their choices. A long-term approach and relevant geographic selection can optimize the prospects for real estate capital gains in Île-de-France.
