House vs apartment: the battle of the costs

Posted on 23 Dec 2020 in Market
House vs apartment: the battle of the costs

There are many reasons which can push individuals to buy a house over an apartment and vice versa. In this article, we will not go deeper into the possible personal motivations but we will concentrate on the financial advantages and disadvantages of each of them.

Price of purchase

We all know that real estate prices vary regarding the place of purchases. Apartments tend to be located within cities and personal houses are found in more rural places. For this reason, apartments tend to be much more costly per meter square than houses. The average price per m2 for houses is €1,894 which is way lower than the average price per m2 for real estate (€3,510). The first win is for personal houses.

Maintenance cost

When purchasing an apartment, keep in mind that you will most likely share the costs with the other owners. In comparison for houses, you will have to assume the entire maintenance costs alone. 

According to INSEE, annual charges and maintenance costs averaged € 2,844 for a house, compared to € 2,100 for an apartment. Regarding heating costs, they are € 1,788 per year for a house, while they are “only” € 900 for collective housing. Finally, for repairs and major work to be done, their average cost reaches 600 € per year for a house, against 300 € for an apartment. The various maintenance costs and charges are therefore 60% higher for a house than for an apartment. Apartments come out as clear winners for this section!

Local taxes

Concerning local taxes, they are – on paper – the same for both types of residence. The calculation criteria are the same, for a house as for an apartment. Indeed, it is the surface area of ​​the property that determines the level of taxation. However, houses are often made up of extra elements that enter into the tax calculation (garage, garden …). That’s a little advantage for apartments!

Mortgage accessibility

Due to higher maintenance costs for houses, banks are well aware of the fact that buyers will have a smaller “reste à vivre” after purchasing a house. This is especially true for “Chateaux” (castles), manors and big properties. Lenders may not even accept financing them (check out our article on castles in France!). It is also hard to predict an increase in the valuation of those properties and indicators tend to show us – in fact – the opposite: more and more residents are leaving rural areas for cities.
But that doesn’t mean it is always easier to finance an apartment, criterias are practically similar to houses. It is important to look at the market, general statistics are not representative of case by case purchases. It is, for example, easier to finance a chalet in Courchevel than a house in Creuse.

Laws on new build properties

New environmental laws are coming into force in 2021. Often, new built personal residences are the first to follow the rules. During summer 2021, personal residences will be the first to have to follow the new environmental laws, which are increasing the costs of purchase. New built apartments will have to adapt to these new laws from 2024, giving a clear advantage for collective housing in the short term.

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