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The mortgage broker Youfinancer had fun comparing the rates that the French could borrow in 1998, when the Blues won their first World Cup, and in 2018. But also real estate prices. Discover how French real estate buying power has evolved
Twenty years ago, the French football team won the World Cup. All the French remember it. This Sunday, the Blues put that and find themselves again in the final, against Croatia this time. The mortgage broker Youfinancer lent to the game comparisons between 1998 and 2018. Was it easy to borrow from his bank to subscribe a mortgage? What was the real estate purchasing power of the French twenty years ago? The least we can say is that these two years were far from similar.
»READ ALSO – Real Estate: find out in detail the evolution of prices in Paris for 5 years
Rates much more favorable borrowing in 2018
In 1998, credit rates were above 6% on average over 20 years (6.4% exactly). Far from the 1.4% recorded by the broker over the same borrowing period. A gap that allows relativising a possible rise in future rates – which will eventually happen. And to say that twenty years ago, while the euro was not yet in circulation, inflation was almost zero (0.6%). Today, the general rise in prices reaches 2% today.
"READ ALSO – Borrow less than 1.4% over 25 or 30 years, it is possible!
Record prices in 2018
As for real estate prices, after peaking at 3,420 euros per m² in 1990 in Paris, they dipped, in 1998, to 2,260 euros per m². Twenty years later, they have more than quadrupled and reached the record figure of 9360 euros per m². The real estate network Guy Hoquet is even convinced that real estate prices will exceed, on average, 10,000 euros per m² by the end of the year. In the provinces, it was in Bordeaux (+ 248%), Lyon (+ 203%) and Toulouse (+ 198%) that prices rose the most, according to the latest figures published by notaries.
»READ ALSO – Real estate: here are the metropolises where prices have risen the most in 20 years
A real estate purchasing power divided by more than two
A drop of nearly five points in borrowing rates – pushing borrowing capacity for 1000 euros per month over 20 years from 135,000 euros to 210,000 euros – but a surge of more than 300% of real estate prices: the balance sheet of the past twenty years is without appeal. "The real estate purchasing power of the French over this period has been divided by more than two, from 53 m² in 1998 to 22 m² today", concludes Sandrine Allonier, of VousFinancer.
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