Real estate: cities where you should not invest

Which regions will be the most promising in the “post-pandemic” period? Should we focus on large or small towns? And which areas should you absolutely avoid for your real estate investments?

We feel, here and there, that people are starting to consider the post-pandemic. In my neighborhood, I have noticed shops that have been abandoned for months and are getting a facelift to accommodate new activities. I am also told that buyers are making a comeback in the real estate market.

It must be said that they bet on a drop in prices. At least 31% think so according to the SeLoger / OpinionWay study carried out in February 2021, while they were only 9% in this case a year earlier. With interest rates remaining low, this may be a good time to consider investing.

Yes, but where should you invest?

And where should you not set foot?

Big cities or small towns?

In a recent note, we pointed out that prices were not on the rise in rural areas where they had fallen by almost 9% in ten years, while the French average showed an increase of more than 6% on the same. period.

In contrast, the increase was significant in cities. According to the Meilleur Agents real estate price index (IPI), prices have, again over 10 years, increased by 29.4% in Paris, 26.6% in the 10 largest cities, and 13.4% in the 50 largest cities.

In 2020, this hierarchy was shaken up: it is the 10 largest cities that show the best price revaluation (+ 2.6%), while those of Paris are only increasing by 1.8%. In the 50 largest cities, the increase is 2.3%.

If we take a closer look at the figures for Best Agents, we see significant differences between the ten main cities in France:

Evolution of real estate prices in 2020
Top 10 major cities


Evolution IPI in 2020


+ 5.5%


+ 4.2%


+ 3.9%


+ 3.8%


+ 3.7%


+ 2.4%


+ 1.3%


+ 1.2%


+ 1.1%



Source: Best Agents

However, these figures show a clear inflection in prices in the 10 largest cities in France, since in 2019, the increase had been 5.2% on average. It had even experienced very high peaks in Lyon (+ 11%), Nantes (+ 9.5%) and Toulouse (+ 7.3%).

Compared to the previous year, large metropolises seem to be stalling. It is true that the pandemic has reshuffled the cards. From now on, it is the medium-sized cities that attract, provided they have a high quality of life, a dynamic economy, efficient transport infrastructure, easy links with large metropolises… Almost squaring the circle!

Popular cities

With the above criteria, Best Agents has drawn up a list of three cities where it is good to invest. In order: Angers, Reims and Clermont-Ferrand, all three are considered “in good real estate health” and have prices per m² which continue to rise.

Last summer, when France was deconfined and thought it was done with the epidemic, Le Figaro and Cadremploi published the “top 20 cities in which to live and work in the green”.

At the top of the ranking: Angoulême, Poitiers, Quimper. Then followed: Arras, Tours, Rennes, Le Mans, Nancy. Angers, cited by Meilleur Agents, was ranked 9th. On the other hand, Reims and Clermont-Ferrand were not in the ranking.

For their part, Meilleurtaux and Meteojob have established a list of cities in which to settle, considering the accessibility of housing and employment. There were: Mulhouse, Aix-en-Provence and Lille on the podium, followed by Rouen, Saint-Etienne, Orléans, Metz, Grenoble, Dijon, Strasbourg.

Le Figaro has also established a ranking of cities where it is good to retire: Andernos-les-Bains, Arcachon, Vannes, Narbonne, Saint-Hilaire-de-Riez, Challans, Cannes, Limoges.

His colleague Le Figaro Magazine has just published the list of cities where it is good to live in which the first places are occupied by Quimper, Bayonne, Niort, Colmar, Vannes, Montauban, La Roche-sur-Yon, Cholet, Valence, Chambéry concerning medium-sized towns. The same classification exists for the big cities: Nantes, Bordeaux, Lyon, Toulouse, Strasbourg, Angers, Rennes.

Finally, let’s not forget, since this is an investment, the list of cities with the best performance in rental property. For the SeLoger site, the top 10 is made up of Limoges, Perpignan, Saint-Etienne, Amiens, Mulhouse, Nîmes, Le Havre, Le Mans, Besançon, Caen.

We will let the reader compare the lists and discover for themselves which cities occupy prime places in several rankings. Perhaps they are the ones to be interested in as an investor?

Cities to avoid

Let’s not forget our initial question: which are the cities where it is better not to invest?

For that, let’s take a look at the projects of the municipalities. Many of them, newly elected last year, display disruptive programs.

In Lyon, for example, the mayor Grégory Doucet and his colleague from the Métropole Bruno Bernard want to reduce the number of Airbnb rental days, increase the number of social housing (i.e. build 6,000 per year to reach 25%), apply rent control, plant “urban forests” of 3 to 5 hectares (and therefore reduce building land), renegotiate commercial leases (with the aim of increasing commercial diversity).

In Bordeaux, Pierre Hurmic also intends to experiment with rent control and impose on developers up to 50% of social housing, supervise Airbnb (limited to 90 days compared to 120 today) and strengthen controls, freeze new constructions and review, on a case-by-case basis, the 30,000 housing units programmed by the former mayor, revise local town planning plans.

In Strasbourg, Jeanne Barseghian declared that she wanted to establish a moratorium on rental evictions in the private and social park. She also wants to hunt for empty homes and Airbnb rentals.

We could continue the exercise for the other cities won by environmentalists last year (Annecy, Besançon, Grenoble, Poitiers, Tours) and those in which they belong to the municipal majority, the program is everywhere more or less the same: restriction in the construction of housing, ban on tourist rentals, rent control, etc.

Investing in these municipalities which will, consequently, see the price of housing increase and rental yields fall (rent control requires), is not a good idea.

Especially since the municipal programs of environmentalists, most often associated with the socialists, the communists and the extreme left (LFI), include a number of expenses of all kinds that will weigh on the financial health of communities. In the long term, therefore, a surge in property taxes and other local taxes (TEOM, TSE, TASA, GEMAPI) is to be expected.

According to the UNPI, property taxes increased by 31.4% on average between 2009 and 2019, while, over the same period, inflation was 10.8% and the increase in rents in the private park by 10%. Due to municipal elections, the year 2020 has seen a break. But while the housing tax no longer exists, the increase can only resume in the years to come. And it will be aggravated by the revision of rental values.

But we finally wonder if all the municipalities are not to be avoided because the “climate” law under discussion in the National Assembly risks complicating the lives of donors everywhere in France. On the program: rent freeze for dwellings considered to be “thermal strainers” from 2022, and a ban on renting them from 2028; increase in energy performance diagnostic points (DPE), etc.

Perhaps it is finally time to take an interest in other investments than rental real estate? The Agora Chronicle is here to help you.

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