Real Estate: the most reliable investment of the past 20 years
In two decades, real estate has proven to be a great investment, beating many other options hands down. What’s property’s secret? A stable, non-volatile, return.
For 20 years now, French real estate has occupied pole position in terms of reliable investments. So attests the analysis published last October by mortgage broker MeilleurTaux.com in conjunction with the firm of economic advisors Astères.
Better than all other investments
Based on a comparative analysis of five other investment types namely, 10-year treasury bonds, shares (French stock market CAC 40), gold, Livret A (tax-exempt savings account), and Euro life insurance contracts, it appears that year on year real estate always offers a superior return. What is driving this performance is the cumulative effect of two photos: easier access to mortgage financing as a result of the drop in interest rates and the significant rise in prices seen since 2000.
Stable and non-volatile returns
Another characteristic of real estate to date has been its regular and non-volatile returns. This advantage is appreciated by purchasers of primary, secondary, and rental properties alike.
The situation in 2015
This situation was confirmed in 2015 even though France’s real estate market has shown a continued slowdown since 2012 and the market for shares has finally shown an upswing: +10% over 5 years and +12% over 10 years.
The outlook for the future
The study foresees an “increase in prices in no way as strong as that of the past decade. An investment in shares ought to offer a better yield by reason of its more extreme changeability.” Nonetheless, an investment in property is essentially well placed for the purchase of a principal residence or by those looking for regular rental income but certainly not for speculative reasons.