Expert Insight, Breaking News, and Insider Stories on Real Estate in Paris
What property features affect rent prices in Paris?
Rent prices depend on the size and location of a property, but also on many other key elements. What drives prices up or down? A study by the startup Homepilot reveals just exactly how certain variables can affect rent prices.
As we all know, an apartment with a terrace on the top floor of a building with an elevator is more expensive to rent than an apartment of the same size on the second floor. But by how much? This is the question that Homepilot, a company specializing in online rental management, is trying to answer. How? Thanks to big data.
Using nearly 137,000 rental ads published in Île-de-France, the startup’s algorithm was not only able to determine those key factors driving rent prices up or down but, more importantly, to estimate their impact on the price of rent in comparison to an average property.
“Our approach makes it possible to isolate the importance of each variable when determining the price of rent, but without taking into account the interaction between the different variables,” says Gilles Bourcy, co-founder of Homepilot. In other words, price differences between each variable cannot be added together to determine a fair price for rent.
Some intuitive results, others less so
However, being aware of the positives and negatives of a particular property makes it easier for landlords to estimate rent prices in a “more systematic, more accurate, more transparent” way, according to Gilles Bourcy.
Some of the results of the study are intuitive. Top floors are particularly popular with tenants, increasing rent prices by 9%, but only if there’s an elevator. Without one, rent falls by an average of 5.9%. On the other hand, ground floor apartments are not very sought after, causing prices to drop by an average of 6.8%.
Other results are less obvious. “We were surprised by the wide price gaps that can exist between a new building, which will be 8.9% more expensive than a building from the early 20th century, and a building constructed between 1950 and 1990, which is 8% less expensive on average,” Gilles Bourcy points out.
Another surprise is the importance placed on the quality of shared living spaces. Housing with deteriorated common areas are rented at 8.5% cheaper on average, while prices decrease by 6% for those apartments in a building with a grocery store on the ground floor.
Little “extras” appreciated by tenants
Balconies are a strong added bonus (+ 5.3%) while the presence of a guardien and separate toilets also adds a lot of value (+ 2.4% and + 1.5% respectively). Sunny exposures (Southern or Western facing) are always appreciated (+ 1.5% to 3%), while a Northern or Eastern view results in prices that are 2.8% and 1% lower on average.
Not surprisingly, apartments with windows on both sides are still coveted by tenants (+ 2.5%). As for those apartments with a street view or a blocked view, prices drop by an average of 1.5% and 3.9% respectively. Finally, the duplex is always a dream come true, costing on average 3% more than a classic apartment of the same size.
These figures are not set in stone and cannot be applied out of context. But they reflect tenants’ preferences, and therefore a market trend, regardless of geographical area or surface area.
Cover Photo: © Jorge Royan / http://www.royan.com.ar