The French have a saying: “En tant que locataire, je jette mon argent par les fenêtres” (As a tenant, I’m throwing money out the window). If you’ve had dinner with French parents or in-laws, you’ve heard this. The conviction that renting is financial suicide runs deep, especially among the generation that bought their Parisian apartments for the price of a used Renault.
But in 2024, with interest rates hovering around 4-5%, property prices frozen at their peak, and a housing shortage that has turned Marseille into a war zone for apartment hunters, the math has changed. A new generation of French workers is questioning whether homeownership deserves its sacred status.
The Generational Lottery: Why Boomers Can’t Do the Math
The core of the debate isn’t financial literacy, it’s timing. Your French parents likely bought their property in the 1980s or 1990s when:
– Interest rates on prêts immobiliers (mortgage loans) hit 15-20% but inflation eroded the debt quickly
– Property in Paris cost €2,000 per square meter, not €10,000+
– Frais de notaire (notary fees) and taxes represented a smaller portion of lifetime costs
One commenter on a finance forum noted their parents’ generation would have struggled to invest the difference anyway, parking cash in assurance-vie (life insurance) policies with near-zero returns. Their wealth came from property appreciation, not financial strategy. When they see 200% gains over ten years, they assume the system works. They don’t see the 7%+ purchase tax (taxe de publicité foncière) or the 30-year ownership requirement to avoid capital gains tax on a secondary residence.
The Hidden Tax Burden That Changes Everything
Here’s what your uncle at Christmas dinner won’t mention: buying property in France means paying roughly 7-8% of the purchase price in taxes and fees for existing properties, or 2-3% for new builds. On a €300,000 apartment, that’s €21,000 to €24,000 evaporating before you even get the keys.
A simulation tool making rounds online shows this clearly. If you invest that €24,000 in markets returning 5% annually instead of sinking it into frais de notaire (notary fees), you’d have €63,000 after 20 years. The tool’s creator designed it specifically to counter family arguments, noting that older relatives “still don’t really agree because they’re boomers who made 200% gains in ten years.”
The prêt immobilier (mortgage) interest adds another layer. At 4.5% over 25 years, that €300,000 purchase costs €450,000 total. Meanwhile, renters can invest the monthly savings difference in a PEA (stock savings plan) or diversified ETFs, though many French savers remain skeptical of stock market returns after decades of banking scandals.
The Flexibility Premium in a Frozen Market
France’s housing crisis has made renting strategically valuable. In Montpellier, rental demand jumped 83% in a year. In Toulouse, it’s up 45%. Even Paris saw a 15% increase in seekers. The supply collapsed by 13% nationally.
This means:
– Mobilité professionnelle: Young workers can chase opportunities in Lyon or Bordeaux without the €30,000 transaction cost anchor
– No taxe foncière (property tax) surprises when local governments raise rates
– No emergency roof repair that wipes out six months of savings
– No exposure to property value declines if the market corrects
An agent in Marseille described putting a listing online and receiving 20 inquiries within an hour. “I have to disable the ads because we can’t respond to everyone”, she explained. In this environment, renters who secured leases before the crunch have a valuable asset: stability without ownership risk.
The Investment Return Assumption That Divides Families
The most controversial variable in every rent-vs-buy calculator is the “return on investment if you rent.” Parents will scoff: “You won’t actually invest the difference.” And they’re sometimes right, behavioral finance shows most people spend the surplus.
But the counterargument is equally valid: “You won’t actually maintain the property properly.” Many French homeowners skip essential travaux (renovations) for years, letting their asset deteriorate. The simulation assumes both parties act rationally, which rarely happens.
The debate crystallizes around small percentages. One analysis noted that shifting variables by just ±1% completely flips the optimal choice. At 3% property appreciation and 6% investment returns, renting wins. Reverse them, and buying triumphs. The problem? Nobody knows future returns, but everyone pretends they do.
The Paris Exception That Proves the Rule
Paris remains the emotional center of French property obsession. Yet it’s also where the numbers look worst. With prices above €10,000/m², a two-room apartment costs €400,000 plus €28,000 in frais de notaire (notary fees). The monthly payment exceeds €2,000, enough to rent a premium apartment in the 11th arrondissement while investing €500 monthly.
The housing shortage has made things stranger. Families stay in rentals longer, creating a cascade effect: fewer available units, higher rents, more pressure to buy at any cost. It’s a self-reinforcing cycle driven by scarcity, not logic.
When Buying Still Makes Sense
None of this means renting is always superior. Buying wins when:
– You stay put for 15+ years (the breakeven point in most French simulations)
– You buy in a city with genuine economic growth and limited construction (Lyon, not rural Limousin)
– You have a 20% down payment to avoid expensive borrower insurance
– You can handle the charges de copropriété (condo fees) that average €50-150/month in cities
The 30-year capital gains exemption for primary residences also matters. While second-home owners face taxes, your main residence remains largely tax-free on sale, a significant advantage over taxable investment accounts.
The Cultural Shift Numbers Can’t Capture
Beyond spreadsheets, France is experiencing a values shift. Younger generations prioritize flexibilité (flexibility) and qualité de vie (quality of life) over the patrimoine immobilier (real estate legacy) that defined their grandparents. They watched the 2008 crisis and pandemic expose property risks. They’ve seen SCI (real estate investment companies) become complex tax traps rather than wealth vehicles.
This explains why the online calculator resonated. It wasn’t just about money, it was about giving younger French workers ammunition in family debates where they’d previously been dismissed as financially naive.
The Only Certainty: There Is No Single Truth
The most honest conclusion is that both sides are partially right. Buying property in France can build wealth, but it’s a leveraged, illiquid, tax-heavy investment with huge entry costs. Renting offers flexibility and potentially higher returns, if you actually invest the difference.
The real mistake isn’t choosing either path. It’s failing to run the numbers for your specific situation: your city, your income stability, your ability to save, and your timeline. As one analyst put it, “We are far from having a single truth on this subject.”
Before your next family dinner, try this: plug your actual numbers into a simulator. When your father-in-law insists you’re throwing money away, show him the 20-year projection. Then ask what his property’s plus-value (capital gain) would be if he’d bought in a declining region instead of Paris.
The numbers might not convince him. But at least you’ll know whether you’re arguing about finance, or about validating life choices made in a completely different economic era.
