Real Estate: Is Inflation Raising Rental Prices?

Real Estate: Is Inflation Raising Rental Prices?
Real Estate: Is Inflation Raising Rental Prices?

On average, apartment rents increased by 1.35% in France in 2021, while house rents decreased by 2.99%. This is what Clamore observed in the first quarter of 2022.

Inflationary rise has a relative effect on rental prices

Rent development is relatively moderate in France despite inflation. In 2021, Apartment rents show a 1.35% increase to settle at 13.08 euros per square metre. Meanwhile, house rents fell 2.99%, to €11.29 per square metre, according to figures published by the private Clamore Observatory. “Over the past five years, we have seen stability in rents”refers to its president, Jean-Michel Camison.

However, depending on the departments and cities, the differences are significant. For example, record growth rates were recorded last year for studios. Versailles showed a price increase of +12.33%, Douai + 10.65% and Coimbra +9.38%. Regarding T2, prices are up +5.89% in Saint-Malo and +4.52% in Saint-Mor-de-Vouses. As for apartments with three rooms and more, prices increased by + 8.34% in Saint-Denis, + 6.52% in Pau or + 6.51% in Brest.

IRL مراجعة Review

Comme l’indique Clameur les hausses sont globalement restées limitsées l’an dernier tout comme au premier trimestre 2022. Une tendance à la stability alors que l’indice de référence des loyers (IRL) a grimpé de 2.48 % sur les trois premiers month of the year. Unheard of since 2008. Nothing surprising since then, as a reminder, IRL tracks the evolution of consumer prices.

“The IRL acts as a tariff shield, because it is applicable only once a year, on the date of the anniversary of the lease,” defines Jean-Michel Camison. Also, it is still systematically below inflation. An essential element while the issue of the IRL freeze invites itself into public discussions in order to protect the purchasing power of the French. Especially since many donors do not implement IRL re-evaluation. They would rather keep rents at the same level rather than risk leaving the tenant for a review of around 2%.

Meeting with donors

However, in the face of inflation, rents are likely to adjust again in the coming months. But Rents will not go up, as Jean-Michel Camison explains. The latter is also opposed to the IRL freeze. “It would be more effective to increase Personal Assistance in Housing (APL)”, He says. An opinion shared by the Abbé Pierre Foundation, who recommends a significant increase in this aid by at least 10%. Consultations are ongoing between the private and social sector owners, professionals in the sector, the Ministry of Economy and the Ministry of Environmental Transformation responsible for housing. The purchasing power of the French is one of the main challenges for the government. In this context, families may find themselves facing a dilemma: should they buy or rent in 2022? To help them check the viability of the purchase project, a mortgage broker can step in. This expert will be able to create a financing plan adapted to the project and family situation.

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