How the French always spend more on housing (but not on food)

In 1976, housing costs exceeded food costs by a single head. In 2022, the housing budget will be twice as large as the food budget.

Secondary to the post-war French, the domestic housing budget exploded and became by far the dominant expenditure today. For a long time, food cost more money than housing. Only after 1976 did the expenditure on housing (17.9% of the total expenditure, including water and energy) exceed, by a small margin, that of food (17.7%), according to INSEE. This is currently the big gap: in 2022, 26.7% of the French expenditure budget is allocated to housing, or twice as much as to food (13.5%).

Rent, loan repayment, water, gas, electricity bills… A large part of housing expenses is called “precommitment” in the language of statistics. In other words, according to INSEE, they are dealing with “a contract that is difficult to renegotiate in the short term”. These limited housing-related expenses, often automatically debited from the bank account, will eat up 22.1% of disposable household income in 2022, up from just 9.5% in 1960. However, changes have been limited in the last fifteen years.

The place of real estate: Housing crisis, new solutions?  - 01/15
The place of real estate: Housing crisis, new solutions? – 01/15

Incomes have grown faster than rents

26.7% of expenses, 22.1% of disposable income, the difference between these two figures is explained with a different basis of calculation, integrating disposable income, as opposed to expenses, the money saved by the French. The increase in the housing budget of the French is mainly explained by the fact that their income has increased less faster than rents and prices per square meter. Between 1998 and 2021, the median standard of living rose by 24%, while the rental index rose by 33% and the prices of older homes tripled (+200%).

These increases have hit the poorest households hard, especially as research shows that the burden of forced spending, especially on housing, increases as families’ living standards fall. In 2022, the poorest spent 38% of their income on housing, according to the Abbé Pierre Foundation.

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