Real Estate, Stocks, Bonds: 40 Years of Comparative Performance

In April 2025, the Institut de l’Épargne Immobilière et Foncière (IEIF) will publish a new edition of its landmark study on 40 years of comparative performance. 

The objective: to assess real estate relative to other financial asset classes in terms of return and risk, within a macroeconomic environment that has undergone profound changes over the past five years.
 

An Unprecedented Macroeconomic Environment
The period from 1984 to 2024 spans an era marked by financial globalization, a disinflationary trend, and a steady decline in interest rates. But since 2019, the fundamentals have changed: the health crisis, the war in Ukraine, the energy shock, persistently higher inflation, deglobalization, and the climate crisis are reshaping the landscape.
These structural shifts have profoundly affected the dynamics of the various asset classes.
 

Performance over 5, 15, 30, and 40 years: a mixed picture
 

Over 5 years (2019–2024)
• Gold leads the pack with the best performance.
• Real estate investments show mixed results:
➔ -7.3% for publicly traded real estate companies,
➔ +6.2% for industrial/logistics real estate.
• Many products (SCPIs, Parisian residential properties, Livret A savings accounts, money market funds, bonds) offer a real return below the inflation rate.
 

Over 15 years (2009–2024)
• Direct real estate investments remain robust, with IRRs between 4.5% and 5.5% per year.
• SCPIs follow a trajectory similar to that of office properties.
• Bond products post weak or negative returns, impacting diversified funds such as OPCIs.
 

Over 30 years (1994–2024)
• The French housing market and publicly traded real estate companies have delivered returns of close to 10% per year.
• Stocks have continued to perform very well over the period.
• Private real estate has slightly underperformed compared to other forms of real estate investment.
 

Over a 40-year period (1984–2024)
• Stocks remain the best-performing long-term investment.
• Real estate yields returns ranging from 7.5% to 10%, depending on the segment.
• Parisian residential real estate stands out, with an IRR exceeding 10%.
 

The risk-return profile: real estate remains an attractive investment
Over the entire period, real estate has positioned itself between stocks (riskier and higher-yielding) and bonds (safer but lower-yielding).
Notably:
• Parisian residential real estate offers solid returns with relatively low volatility.
• Listed real estate investment trusts (REITs) are more volatile, but their returns remain attractive.
This ability to combine returns and resilience continues to make real estate an essential pillar for diversifying a portfolio over the long term.
 

A recent but necessary correction
As Stéphanie Galiègue, Deputy CEO of the IEIF, points out:
“Real estate investments have taken longer than stocks or bonds to adjust to the new post-2020 economic environment. Today, they, too, have entered a correction phase, particularly in the office and real estate investment sectors.”
 

Negative 5-year IRRs in certain segments (real estate investment trusts, office properties) illustrate the need to adapt to higher interest rates and profound structural changes.