Rental investments in Toulouse

With 449,330 inhabitants, the “Pink City” is the fourth most densely populated commune in France. At the centre of an urban area accommodating 1,218,160 people, the capital of Haute-Garonne and Midi-Pyrénées chalks up constantly rising population figures. An influx which has an impact on property transactions, but also the rental market.

Reasons for settling in Toulouse are certainly not lacking. Beyond its quality living standards, renowned cultural life and the urban projects which are flourishing in all four corners of the “City of Violets”, it has a large student community. Boasting one of France’s oldest universities, it hosts 100,000 students who enroll each year. In 2009, the magazine “L’Express” designated Toulouse as the most go-ahead city in France, a compliment reiterated last year by “Challenges”. The aeronautical industry is a major job provider, together with education and research. The greater urban area proudly reports the 3rd highest GDP in the country and an extremely low level of debt. All qualities justifying a largely positive migratory balance, partly fuelled by arrivals from neighbouring départements. 46.5 % of the residents are under 29 years old.

“The centre of Toulouse benefits from good public transport services and easy access to all kinds of shops and amenit­ies,” says Nancy Masidivinga of Absolu’Immo 31. “Investors in this neighbourhood target the market for both students and young employees, certain that they can rent out their properties easily without sacrificing long-term value.” The heart of the city is special in that it plays host to several educational establishments within a radius of 500 metres, including the faculty of Social Sciences, “Sciences Po” and the “Ecole Supérieure de Commerce”. Since 2009, budgets devoted to rental investments have not changed : they range from 80,000 to 130,000 €. Around the Capitole, the price per sq. metre ranges from 3,000 to 5,000 €. Among her most recent transactions, Nancy Masidivinga mentions a studio of 22 m2 near Jeanne-d’Arc which sold within 48 hours for 78,500 € and is likely to be leased at 400-450 €/month, and a 1-bedroom apartment of 41 m2 near the metro station of Les Argoulets, priced at 107,000 €, giving a monthly income of 550 €. Buyers are particularly vigil­ant about charges, which lower the yield if they are too high. Generally speaking, the préfecture of département 31 benefits from the double blessing of the student community and the appeal exercised by its employment pool.

Magali Joulia of the Cogerens agency mostly focuses on old intra-muros buildings, “a commodity more widely represented in the files, more profitable and often benefiting from better locations. Too frequently used, the term “crisis” does not apply to the centre of Toulouse. As for reduced activity attributed to the reform of capital gains taxes, it has been largely compensated for by very low mortgage rates.” The rental investment clientele was once mainly composed of buyers from outside the region. The trend has now reversed : particularly aware of the potential offered by their town, the locals are investing in bricks and mortar, pleased to benefit even today from a yield of 5 %. And even in highly-prized neighbourhoods such as Les Carmes, where our estate-agent has just handled the sale of a studio of 18 m2 priced at 75,600 €, ie. 4,200 €/m2. Worth noting, a modification in the approach to rental investments : the “personal appeal” factor is making a comeback. Many buyers care about the building’s architecture and the charm of the property itself. Undergoing lots of changes, Toulouse is looking to the future and constantly strengthening its power of attraction.

Nicolas Deisieux of Deisieux Immobilier is currently marketing 45 new apartments with one to four main rooms on the Avenue de La Gloire, near the Canal du Midi and Saint-Aubin, pegged at 4,500-5,000 €/m2, terrace and parking place included. To be delivered in mid-2015, this development is of interest to investors within the context of tax benefits accorded by the Duflot scheme. However, out of every ten sales dedicated to rental purposes that he orchestrates, only two concern new properties. All the neighbourhoods with colleges are popular except, perhaps, Le Mirail. In the centre, constant demand means steady prices. While a few owners may be worried by the possibility of rapid degrad­ation of their properties, a phenomenon which is, in fact, rather rare, the majority appreciate the high percentage of good payers among the student clientele, assisted by their parents and the CAF. The choice of housing is pretty diverse, especially as regards communal premises, even though in many cases renovation has already been carried out.