are you buying at the right price?

Investors: Are you buying at the right price?


are you buying at the right price?


The relevance of the purchase price of a property is logically one of the main questions an investor asks. Often the first reflex, an internet search for a price per square meter in a specific area, shows that nothing is more complicated than finding reliable information. Agency calculators, public estimators like “Demande de Valeur Foncière” (Property Value Request), or specialized blog articles, the figures vary significantly.

The reason is simple: the price of a property is a moving and multifactorial value. It is a conjunction of numerous elements that need to be well understood to invest knowledgeably. How is the price of a property calculated? What truly enhances or diminishes the value of a property? Intrinsic value, economic and social context, PATRIMOLINK offers a quick overview of the elements that matter when estimating a property.

What to think of online calculators?

There are numerous online tools that propose to quickly and easily quantify the value of a property. But are they truly reliable? To find out, it’s necessary to understand how they work.

The web is teeming with calculators, each offering its method of computation. These tools are not useless; they provide a first idea. Nevertheless, their limits should be kept in mind.

For the most part, price evaluations per square meter are based on averages of past transactions. They reflect amounts from months, or even years, prior. They do not take into account the recent, and very rapid, developments in the real estate market.

It’s also important to know that these averages are calculated based on a specific set of properties (by a network of agencies, a selection of transactions). They thus provide a partial view of the market.

Some engines include in their calculation a wide variety of properties, ranging from parking spaces to houses. However, the intrinsic details of the property are necessary to ensure “comparing apples to apples.”

For example, the DVF (Demande de Valeur Foncière) calculator does not allow specifying the characteristics of the studied property, such as its general condition, floor, or orientation. Some calculators indiscriminately include properties sold in Bare Ownership, even though they are sold with a discount. The results are therefore very approximate.

These tools, based on global averages, lack precision, making them sometimes misleading. A relevant and fair estimation must cross-reference more information.

What are the different fundamental elements of a price?

The first step in determining the price of a property is calculating its surface area, specifically its habitable area, also called “Carrez” area. This is the total surface area of the property, subtracted from parts with a height of less than 1.80 meters and areas occupied by walls, partitions, stairwells, ducts, door and window recesses. Some rooms and annexes are also not counted in the habitable area but may enhance the value of the property. These include, for example, garages, parking spaces, cellars, balconies, or verandas.

Another observation is that market laws show that (Paris presenting exceptions) the smaller the property, the higher the price per square meter. This is explained by the stronger demand for smaller surfaces.

The second step in the estimation will focus on the intrinsic value of the property. It consists of several criteria. The most obvious are the physical properties and the legal context of the property.

Firstly, the physical characteristics of the property are taken into account, meaning everything related to the quality of the building and the amenities offered. This includes, among others:

– the construction (materials, finishes, insulation, soundproofing),

– the architecture (proportions and distribution of rooms, aesthetic aspect, although this last point is subjective),

– the general condition (year of construction and maintenance, recent updates to standards),

– the amenities (type of heating, sanitary facilities, pool, parking),

– the geographical location (proximity to services and transport, absence of nuisances, type of neighborhood).

While these evaluation elements are quite tangible, others are less so. Exposure, view, floor level, and ceiling height also change the value of a property.

The floor level, with or without an elevator, is a very good example. In setting the price, the 2nd floor is considered the median level. Lower floors, less bright and more prone to overlooking, are often cheaper. Upper floors, on the contrary, are more highly valued. These characteristics must be taken into account in any calculation through a weighting system that will depend on their size, layout, and general condition. Two apartments of the same area, located at the same address, can therefore have two different prices per square meter.

the pricing according to floors


In a third step, attention is paid to the legal framework governing the property. There are numerous urban planning rules that can positively or negatively affect the value of an investment. The SCoT (Schéma de Cohérence Territoriale – Territorial Coherence Scheme) and the PLU (Plan Local d’Urbanisme – Local Urban Plan) are particularly important as they regulate the development of the territory where the property is located. They can, for example, impose additional regulations regarding equipment or the quality of the building.

This is especially the case if the property is located in a protected area, if it is classified or listed as a historic monument. In this case, while the aesthetics and heritage value of the property can be real “pluses,” the additional costs of renovation work should not be neglected. Paradoxically, historical properties can be sold for a pittance due to maintenance costs being too high.

We will also consider possible servitudes: right of way, right of view, or natural servitudes or those of the public domain. A shared entrance or courtyard can negatively affect the price of a property.

Finally, a property sold occupied may see its value diminished. The occupancy lease preceding the sale must be respected by the new owner as long as the contract is valid, and the occupant is up to date with their rent. The discount varies depending on the remaining duration of the lease: the longer the remaining time, the lower the price. It will also be more significant if the rent is low because it can be difficult to reassess it. Finally, the age of the tenant is important: people over 65, with modest incomes, are more protected.

Invisible, the legal context should not be neglected. It is an important element in calculating the value of a property.

the components of the real estate price


Determining the price of a property is a complex and precise analytical task that global averages easily accessible online do not reflect. Trusting a real estate market specialist is therefore not useless for a better understanding of your purchase, especially in a context of high demand.


How does the dynamism of the real estate market affect the value of a property?

Once the intrinsic value of the property has been evaluated, attention must be paid to the economic and social context of its acquisition. Real estate is primarily a market, where supply and demand meet. It is constantly evolving, which makes its appreciation subtle.

Regarding the supply of properties, specialists agree that France suffers from a construction deficit. We already discussed this in our article on the mid-term assessment of the French real estate market (in French). Since then, the Covid crisis, followed by supply chain issues for construction materials (and the surge in their prices), has slowed down construction sites.

Increase of construction raw materials prices (diverse plastics, copper, metal bits)



According to the March 2021 figures from the Ministry of Cohesion and Territories, the number of authorizations is down by 12.4% compared to the 2019-2020 period. Given that 2022 is an election year, which is not conducive to launching new projects, there is nothing to prevent the housing deficit from continuing to widen.

While the supply is dwindling, demand continues to rise. The reasons are manifold. Beyond favorable borrowing conditions, demographic factors such as population growth, longer life expectancy, an increase in divorces, and a decrease in the number of people per household can be cited.

Automatically, the meeting between this increased demand and a decreasing supply pushes prices for both purchase and rental upwards.

Therefore, the economic and social context is a crucial element to integrate into any price calculation. It requires constant monitoring as its developments are rapid.

Le contexte économique et social est donc un élément crucial à intégrer à tout calcul de prix. Il demande une veille constante, car ses évolutions sont rapides.



Estimating a property is a complex operation that requires a good understanding of the real estate market. There is no single answer. It is necessary to cross-reference numerous factors that will positively or negatively weigh on the value of a property. These factors are evolving because they are highly contextualized. Being accompanied by a professional in the sector will allow for a comprehensive discussion on this crucial point of your investment choice. With our thorough knowledge of the French real estate market, PATRIMOLINK can assist you in this analysis.


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Content grouped for informational purposes and not replacing current regulations. Without consultation with our experts, PATRIMOLINK cannot be held responsible for any potential consequences of implementing the advice and information provided in this article.