Real estate market continues to be strong in Paris, with prices stable

The first half of 2016 saw the real estate market perform well, with buyers increasingly aware that now is the time to purchase in the French capital and its region, according to the notaires. The Paris and Île-de-France Chamber of notaires’ latest market report finds that prices are unlikely to rise significantly in coming months with the sector’s outlook remaining favorable. The dynamic sales activity that began in the second half of 2015 has continued into this year, with historically low levels of interest rates motivating buyers to finalize their home ownership projects.

Since the spring of 2015, the Parisian real estate market’s recovery has not wavered. Property sales were up 11% from Q1 2015 to Q1 2016, with approximately 33,300 homes sold in the first quarter of this year. This figure is just 9% below number recorded during the market’s “high period” from 1999 to 2007, and 3% higher than the average of 32,300 sales over the past 10 years. While Paris suffered a slight slump in early 2016 — a factor attributed to the increase in transaction taxes that came into effect on January 1 — figures from April onward show that sales have increased compared to last year. Sustained activity has not impacted prices, which remain steady.

The notaires’ statistics show that in Paris, prices are increasing very slightly, having risen by 2.3% in a year on average. The average price in the capital has been hovering just above the 8,000€/m2 mark since late 2015 and is expected to reach 8,240€/m2 by September. Prices aren’t expected to increase much over the summer, when the market is traditionally slower, with a 0.3% rise in apartment prices and a 0.4% growth for house prices over the month of July. This brings the average for both property types in the capital to 8,060€/m2.

Activity levels are also expected to stay high, with housing demand remaining strong across the Île-de-France region. The notaires anticipate that a lasting economic recovery in the country would spread its positive effects to the real estate market, guaranteeing a return of confidence, ensuring the sector’s long-term balance and erasing the worry that the market’s good performance is currently being propped up by the low levels of interest rates, which will likely not continue indefinitely.

Photo credit: Flickr / Jean Pierre Dalbéra