With the end of the Pinel tax exemption system, investing in new properties no longer attracts investors so much. However, nearly 30,000 new housing units will be built along the new metro line. Good or bad opportunity? The experts answer us.
These qualities, combined with a stone price that remains cheaper than other large cities, make the Pink City one of the favorite hunting grounds for real estate investors. “Investing in Toulouse does not involve many risks. It is a large city that remains attractive and above all profitable to amortize these real estate investments”, says Sébastien Bénet, president of the National Real Estate Federation of Haute-Garonne (Fnaim31) .
30,000 new homes
However, in recent years, investors have become increasingly rare. The cause is the increase in credit rates and construction costs, as well as building permits issued in dribs and drabs. But good news, rates have started to fall and then some 30,000 new homes will be built along the route of the new metro line which will connect the cities of Colomiers and Labège. A new opportunity to invest in Toulouse stone? While the announcement may seem tempting, the end of the Pinel tax exemption system risks discouraging private owners.
“We will have to adapt while waiting for the arrival of a new financial law which we hope to see as quickly as possible. Now there are other options such as non-professional furnished rental (LMNP) or Malraux in the old ones which still remain interesting”, explains Adrien Nadal, asset manager of the Toulouse company Casoxia. Thus, in the case of an LMNP, for example, the owner – the landlord will be able to benefit from a reduction on the rents received which can reach up to 50% depending on the annual income.
Lower tax interests
However, despite the lower tax interests, these new districts that will develop along the C line remain a good opportunity for the asset manager. “Some of them, such as Matabiau and its new business centre, will strengthen their attractiveness. Without forgetting that the neighborhoods that did not have a nearby subway will inevitably increase in value in the years to come, also giving rise to interesting capital gains on the rents received in the meantime”, continues Adrien Nadal.
A vision also shared by Sébastien Bénet, president of Fnaim31. “Investing in new buildings is certainly less interesting from a tax point of view today, but it remains so in terms of amortization of a real estate investment. Furthermore, with the metro we will have new traffic in Toulouse, creating new dynamics. On the other hand, line C will not lead to an increase in prices until it arrives, but the decision to buy must be made quickly”, says Sébastien Bénet.
Low impact on prices
Among the reasons to invest as soon as possible are promoters ready to “sell” their programs, given the crisis. “There are currently unprecedented negotiations between developers, especially for the purchase of some properties. Investors have very important and previously unthinkable negotiating levers”, observes the president of Fnaim31.
Regarding the impact of the C line on the price of the stone, Sébastien Bénet wants to be more nuanced. “If the arrival of line A had a huge effect on prices, that of line C should be less because transport is already everywhere. That said, the impact should be more pronounced at the end of the year. The line, especially in the town of Labège which should experience new growth”, he adds.
“We can expect a profitability of between 2% and 4%”
When asked about the profitability – a ratio that measures the income generated by a rental property compared to its purchase price – of these new housing units, the property manager prefers to play the card of prudence. “It is currently difficult to make predictions given that the market is still blocked, but we can count on a profitability of between 2% and 4%,” analyzes Adrien Nadal. Profitability clearly decreasing compared to previous years.
“Today, in terms of profitability, financial products are more advantageous than real estate products”, admits Sébastien Bénet who advises moving towards neighborhoods like Empalot which can generate good profitability.