Les Boomers ont-ils eu la vie facile ? La réponse dans le logement et l'immobilier

The current housing market is described as catastrophic, with a stark contrast between generations regarding property ownership. The video argues that younger generations face a severe housing crisis, while previous generations, specifically "boomers," had an easier time acquiring property. The central theme revolves around the idea that the older generation benefited from favorable conditions and now it's crucial to help the next generation build their future rather than taking everything for themselves. The episode, the second in a series titled "Did Boomers Have an Easy Life?", focuses specifically on housing and uses data to demonstrate the challenges faced by young couples today compared to those in 1975. The analysis begins by comparing two childless couples looking to buy their first home: one in 1975 and another in 2025. In 1975, a 25-year-old couple with modest incomes could aspire to buy a simple home to start a family. At that time, housing prices were close to income levels, remaining stable within what is called the "Frigit tunnel." In 1975, the average price of a home represented approximately three years of income. The average disposable income per household, adjusted for inflation, was about €48,952 per year. A 100 m² property in France cost around €103,781, or roughly €1,040 per square meter. For instance, a new two-room apartment in Paris was priced at €167,768, representing about 3.43 years of income for a modest couple. However, housing standards in 1975 were significantly lower than today. Many homes built before 1949 and up to the 1970s lacked proper insulation and were often constructed with asbestos or lead. Less than half of all homes had a shower or bathtub, and many did not have indoor toilets or even running water. Only 36% of primary residences had central heating, and nearly 40% lacked basic sanitary comfort. This means homes were often old, sometimes unsanitary, and far from modern comfort levels. Despite these conditions, the financial aspect of home ownership was more favorable. While interest rates were high, around 10-11%, this was offset by high inflation, which meant the real interest rate (net of inflation) was negative in 1975. Loan durations were also longer for new builds than for older properties, averaging around 17 years for new homes and 14 years for older ones. Crucially, between 1975 and 1985, average inflation ranged from 10% to nearly 15% annually. This high inflation had a significant impact on fixed-monthly credit payments. As nominal incomes increased with inflation, the burden of a fixed monthly payment lessened considerably over time. For example, the minimum wage (SMIC) increased from €1.18 in late 1975 to €3.89 in mid-1985, and median net annual salaries rose from €3,645 to €10,829 in the same period. For the 1975 couple, the "effort rate" (the proportion of income dedicated to mortgage payments) decreased rapidly. It dropped from about 26% initially to 10% after 10 years. Similarly, the real value of the remaining debt eroded quickly due to inflation. After 5 years, the remaining debt in constant 2025 euros was only about €45,248, and after 10 years, it was a mere €16,325. Additionally, new housing aid programs like APL (aide personnalisée au logement) introduced in 1977 further reduced the financial burden for modest households. Thus, a modest couple in 1975 could typically become homeowners by the age of 40, even in Paris. Fast forward to 2025, and the situation is dramatically different. The IGEDD index, which compares housing prices to disposable income, rose from 0.9 in 1975 to 1.55 in 2025. This means housing is about 70% more expensive relative to income today than it was in 1975. In Paris, a studio that required about 3.8 years of salary in 1975 now demands at least 10 years of salary. Since 2000, real estate prices have soared due to factors like lower interest rates, longer loan durations, and increased household debt. The cost of land has also become a major factor, with significant speculation. The war in Ukraine and the resulting energy crisis have driven up construction material costs, especially for energy-intensive materials like cement, while climate protection measures also increase building expenses. Despite lower interest rates (3-4% in 2025 compared to 10-11% in 1975), housing prices have doubled or even tripled, and income increases are often consumed by other constrained expenses. Pre-committed expenses, which were 19% of disposable income in 1975, now stand at 29.5% in 2024, with housing being the largest component. A young couple in 2025 with an initial annual household income of €60,500 has very little margin to buy their first home, let alone a two-room apartment in Paris. To compensate for high prices, banks have extended loan durations from 14 years to around 23 years. Access to credit has also become much stricter, with banks demanding more guarantees, stability, and a significantly larger down payment. Many young professionals find their home ownership dreams blocked before they even start, due to insufficient financial dossiers. Comparing the two couples, the initial credit burden is similar, but the 1975 couple's burden lightens much faster. In 2025, even after 10 years, the credit still represents about 23% of income, and around 19% after 20 years. The real value of the debt in 1975 diminished rapidly due to high inflation, whereas in 2025, the decrease is much slower. After 10 years, a 2025 couple still faces €151,823 in real debt, and €36,093 after 20 years. The 2025 couple would need to pay off their mortgage for about 15 years before their remaining capital even reaches the initial purchase price of the 1975 couple. This means the 2025 couple would only become full owners approaching 50 years old, ten years later than their 1975 counterparts, with the credit burden weighing heavily for much longer. The example of the two-room Parisian apartment highlights this, with its price increasing by 180% between 1975 and 2025, making it effectively unaffordable for a young couple today. The conclusion is sobering: young people today face a much heavier and longer financial burden to access property compared to the boomer generation. In 1973, 35% of 25-45 year olds with the lowest incomes were homeowners; today, only 17% are. For those unable to buy, the alternative is renting, which often means accepting smaller, more distant, or less desirable locations. Many young professionals change homes annually to adapt to these constraints. However, even renting is challenging, as rental offers are at an all-time low in France, and guarantees required by landlords are increasingly stringent. The cost of rent has also more than doubled relative to tenants' incomes between 1970 and 2013, from 10-12% to 23-24%, partly due to improved housing quality and structural effects, and partly because tenants have become poorer relative to other households. Housing is now a factor of renunciation: students give up studies due to lack of housing, 25% of young couples forgo having children, and 22% of employees turn down jobs because they cannot find housing. As a last resort, many young adults return to live with their parents. Over 1.26 million people aged 25 and over are in this situation, often putting their lives on hold. Cohabitation, however, is not always easy. For those with no other options, the situation can escalate to homelessness, even for employed individuals who end up sleeping in their cars. Even some boomers are finding themselves in similar desperate situations. The statistics are dramatic: while over two-thirds of boomers own their homes today, only 16.7% of those under 30 do. Housing no longer just costs a lot; it disrupts lives. Milestones like living alone, forming a couple, and starting a family are delayed, weakened, or even prevented. Access to housing, especially ownership, is significantly harder for young people today than it was for boomers. The video concludes by posing a question for its next episode: what will happen when the generation holding a significant portion of France's wealth and real estate disappears?