Expert Insight, Breaking News, and Insider Stories on Real Estate in Paris
Nothing stopping price increases in France and its capital
National sales numbers and prices continue to rise throughout France. Prices in Paris, the nation-wide leader, will continue their ascent in the new year, according to the latest quarterly review by Paris notaries.
National numbers on the up and up
In France, sales numbers have reached a new record as prices continue to climb. According to French notaries, between July and October, prices increased by 3.2% compared to last year. By the end of October, the number of transactions reached 1.059 million, a new national record. The previous one, set just last year, was one million.
It’s been a “lively and unfailing quarter for real estate” remarks Theirry Delesalle, Paris notary, during a press conference. At this rate, the market will continue its upward spiral, promising a new year of price increases, after having already delivered for the past three. “The main reason for this dynamic activity is the decrease in interest rates,” explains Delesalle.
Prices in Paris continue their climb
Prices in Paris in particular also continue to rise. After having beat the €10,000/m2 record at the end of September with an average price per square meter of €10,080, Paris prices will continue to climb in the following months. According to indicators from Paris notary pre-sale contracts, prices should approach €10,300/m2 in January, rounding out an overall price increase of 7% for the 2019 year. As for the immediate suburbs of Paris, prices should reach close to €5,000/m2 for apartments, an increase of 5,8% over one year.
A sound investment
“These increased prices aren’t dissuading buyers,” observes Elodie Frémont, Paris notary. “Property in Paris is a sound investment and buyers are still benefitting from really competitive interest rates.” Contrary to popular belief, indicate notaries, the proportion of young buyers in Paris proper is increasing just like in the rest of the country. “Both young first-time buyers and first-time investors under 35 are buying now more than ever thanks to low interest rates,” specifies Delesalle.
Paris in three sectors
13 arrondissements out of 20 have now beat the €10,000/m2 record, compared to 10 arrondissements one year ago. Exit the concentric image of the snail used to describe the hierarchy of prices between arrondissements in Paris intra-muros. According to notaries, three distinct sectors have recently emerged: the east, at less than €10,000/m2, the center, at more than €12,000/m2, and the west, somewhere between the two. The two price extremes are the 19th, the least expensive arrondissement of Paris, with prices at €8,490/m2, and the 6th, the most expensive arrondissement of Paris, which, for the first time ever, boasts prices above €14,000/m2, at exactly €14,180/m2.
The Brexit effect in the 16th and 7th
Almost all of Paris’s 20 arrondissements experienced an annual price increase of more than 5% between the third quarter of 2018 and the third quarter of 2019. The 16th and the 7th, boasting price increases of 6.1% and 7.1%, respectively, profit from the flux of French people returning from London due to Brexit. “This movement, having increased over the past two years, boosts the market for large Parisian apartments, highly sought after by this particular clientele who disposes of a greater buying power and is thus able to buy expensive property,” remarks Delesalle. This phenomenon, however, also adds fuel to the fire, drying up an already very competitive market, where new-builds are a rarity, unlike in its immediate suburbs.
Condemning the idea of a “potential real estate bubble in the capital,” Delesalle acknowledges that the only drawback of the continued price increase is the forced exit of many residents away from the center of the capital and to the outskirts, increasing their transportation time to the city.