L'exubérance rationnelle de l'immobilier

House prices have risen strongly since 1997 in France, like in many other developed countries. Indeed, housing supply has not been strong enough to answer a buoyant demand. Household demand for housing has been mainly boosted by falling interest rates and a lengthening of loan duration, but also by demographic factors and foreign investment. The increase in house prices seems therefore justified and not the sign of a speculative bubble, like in Paris at the beginning of the 1990s. This is confirmed by the analysis of housing yields: due to the inertia of rent prices, rates of return on housing have decreased but not as much as long-term interest rates, thus remaining slightly higher than bonds yields.