First Time Paris Homebuyers Borrow Big in 2016
Thanks to a mix of low or zero-interest rate loans for young buyers and a revived property market, first-time buyers increased their activity significantly last year. Looking ahead, one in five under-30s are considering buying a property in the next 12 months.
Much has been made of France’s revived property market in 2016, with transactions and price growth approaching the golden years of 2000 to 2007. Young, first-time buyers are taking advantage more than anyone else when it comes to snapping up cheap loans and desirable properties.
According to Meilleurtaux.com, a consumer mortgage information site, under-30s received 22% of property loans in 2015, a figure that shot up to 34% in 2016. The latest numbers indicate that this is a trend that will continue into 2017.
Many millenials see property as the first way to build a patrimoine, the French word for an estate, including property, net worth and savings. The PTZ, or zero-interest loan, available primarily to young people and those investing in new-build properties, has grown significantly. That goes a long way to explaining how young people were able to represent such a larger market share in 2017.
In 2015, 65,000 households took advantage of the PTZ, nearly doubling to 120,000 households in 2016, according to statistics from Vousfinancer.com. Property loans with some PTZ stipulation grew by 75% in 2016, versus 24% growth for loans in general. As reported on previously, the growth in property loans is far outstripping loans in general.
For 2017, the prospects look good for under-30 first time buyers. Out of 18-24 year-olds surveyed, 14% say they want to get on the housing ladder in the next 12 months. For 25-34 year-olds, this figure jumps to a quarter. They will find banks only too keen to snap up their business, as lending institutions are opening their funds to young salaried professionals with great earnings potential.
A separate study that looked at the demographics of the average first-time buyer in Paris shows that the term ‘young buyer’ is not necessarily ‘under-30’. Lavieimmo.com found that the average age of the first-time buyer in Paris is 35. Single households had an average salary of €5000 per month, rising to €9000 per month for couples. These borrowers will leverage an average of €300,000 for their transaction, contributing their own savings of €185,000 on average.
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