To get a clear picture of this year's market, let's discover the numbers and letters behind "real estate 2019".
Real estate is a subject that continues to unite the French. While 65% of them own their own home, the remaining 35% aspire to do so. And many also want to invest in rental property to generate additional income. What can they expect in 2019 to make their plans a reality? Answers in a few words and key figures for "I M M O B I L I E R 2 0 1 9".
I for investment
Older property should be well housed in 2019. A new scheme dubbed the "Denormandie" after the French Minister for Town and Housing is set to see the light of day. It will allow a tax reduction of up to 21% of the total cost of the transaction, provided that the cost of renovation work amounts to at least 25% of the purchase price. It remains to be seen which communes will be affected by this new measure.
M for market
To keep track of real estate prices, the immonot website publishes the Tendance du marché (TMI ) every 2 months. For the start of 2019, the notaires are predicting relative stability in prices, while transactions should approach 950,000 sales in 2018, coming close to the record recorded in 2017 (968,000 sales).
M for house
While the construction of single-family homes currently meets the energy performance requirements of RT 2012, it is set to undergo a new evolution with the introduction of RT 2020. Houses will produce as much energy as they consume. These buildings will be based on two main principles: the passive house, which operates in complete autonomy, and the positive energy house, known as BEPOS, which generates more energy than it consumes.
O as in work
The construction of a house or building requires the submission of a building permit. It takes 2 months to process the application. Within 15 days of receipt of the application, a building permit notice is posted at the town hall, setting out the main features of the project.
B for Bail
Drawn up between the owner and the tenant, a lease is similar to a private agreement when it is drawn up and signed directly between individuals. On the other hand, it is authentic when signed at a notary's office. An authentic lease has a date certain (which cannot be contested), probative force (which confers an indisputable character on the facts stated and recorded by the notary) and, above all, enforceability. When the deed contains an obligation to pay rent, the notary gives the landlord a copy of the deed. By handing over an enforceable copy, the landlord can then ask a bailiff to take legal action to collect any outstanding payments.
I as in interactive
This new year should confirm the success of the 36h immo interactive sale in 2018. It should be remembered that this is a bidding principle, similar to an auction, where buyers are invited to make price proposals from the 36h-immo.com website. At the end of the sale, which takes place online over 36 hours, the seller chooses the offer that seems the most attractive in terms of price or the most reassuring in terms of financing.
L for rental
2019 will continue to offer great opportunities for investors in new-build property. Under the Pinel scheme, if you buy a VEFA (vente en état futur d'achèvement) property, you can benefit from a tax reduction of up to 21% of the purchase price. You must commit to renting the property for a period of up to 12 years, and comply with income and rent ceilings for the tenant.
I as in interest
Interest rates are very attractive, allowing you to borrow at an average rate of 1.40% over 15 years. This remains one of the most attractive ways to reduce the cost of borrowing. Remember that in 2014, rates were close to 3%, which didn't allow for the same purchasing power. Let's make a comparison to appreciate the gains for the borrower:
- January 2019 at a rate of 1.39%: monthly payment of €646 with insurance;
- January 2014 at 3.00%: monthly payment of €721 with insurance.
E for energy
The energy voucher can be used to pay all or part of your bills for electricity, gas, heating, domestic heating oil or other heating fuels (wood, etc.), as well as certain expenses related to home energy renovation. From January 1, 2019, the energy voucher will see an increase of 50 euros. This should increase its amount from 150 to 200 euros on average. The energy voucher is awarded on the basis of household resources and composition. To check your eligibility, visit the official chèque énergie website.
R for renovation
While the CITE(Crédit d'impôt pour la transition énergétique - tax credit for energy transition) was due to end on December 31, 2018 and be transformed into a bonus in 2019, the Finance Bill renews this scheme under the same conditions as in 2018. It will once again be possible to change your windows and benefit from a tax reduction of 15% of the cost of the work, provided you replace single glazing with double glazing. This aid will also be capped at 100 euros per window replaced.
AND 2019?
2: this is the duration of the biennial warranty (2 years) during which the builder who carried out the work must repair or replace any equipment that fails to function following acceptance of the work.
0 0: This is the 0% zero-rate loan that can be granted under certain conditions to build a new home or buy an existing one.
1: This is the 1% action logement loan available to employees of private companies employing at least 10 people. The amount varies from 7,000 to 25,000 euros.
9: This is the number of years a property must be rented out to qualify for the Pinel tax reduction, which is equal to 18% of the property price.
Christophe Raffaillac