With real estate prices on the rise, Paris population on the decline

Paris lost nearly 14,000 inhabitants between 2009 and 2014. A decline that is worrying the government and that has been linked to the real estate market.

There are apparently fewer residents in the city of Paris. According to the latest figures published by INSEE, Paris lost 13,660 inhabitants between 2009 and 2014, going from 2,234,105 inhabitants in 2009 to 2,220,445 in 2014. A decrease that has been particularly striking in 14 of its 20 arrondissements, specifically the center of Paris. Experts have given many theories as to why this is so, and real estate has proven to be a central theme.

Deserting central Paris

According to Le Parisien, the 1st, 2nd, 4th and 8th arrondissements each lost 1% of their population over the last 5 years, while the 12th, 14th, 17th and 19th arrondissements were the only ones that saw their population increase. Despite having regained inhabitants since the historic low point of 2.11 million inhabitants in 1998 (as per the Atelier Parisien d’Urbanisme), the downward trend shows that Paris no longer attracts buyers seeking to establish their primary residence in the city. On the other hand, suburbs such as Vitry-sur-Seine, Argenteuil and Aubervilliers, Asnières-sur-Seine and Issy-les-Moulineaux have seen incredible increases in population. All leading to wonder why people are moving away from the center.

Fewer births

Marie-Christine Parent, Director of INSEE Ile-de-France, stressed that Paris is affected by a decrease in population due to the low number of births compared to deaths: “There are fewer women of child-bearing age. It’s an age pyramid effect: there was a birth deficit in the 1980s and 1990s, and children were not born, specifically women who would have been of childbearing age today.”

More Airbnb rentals and second homes

Others claim that it is illegal forms of vacation rentals such as AirBnb, that are causing the decline in population. In the 1st arrondissement, which has seen a 5% decrease in inhabitants over the last five years, mayor Jean-François Legaret described the phenomenon as economic disaster. The issue with apartments being used solely for rental purposes is that the renters do not contribute to the local market: “The occupants who come for a weekend do not consume in the local shops, don’t sign up their kids to the local schools. This is a negative phenomenon and we must combat the multiplication of these short-term rentals.”

Secondary residences, which are estimated at around 100,000 have also been suggested as determining factor to the decline. In an effort to reduce the trend, the Mairie intends to increase taxes on secondary residences and regulation on tourist rentals.

Dissuasive real estate prices

The French want to own their homes, and the primary factor discouraging them from looking in Paris is the cost of such an endeavor. According to real estate network Century 21, 79.4% of buyers in Paris last year were mid-level and senior managers or professionals. For younger households, those awaiting a child for example, spending € 8,400 per square meter in Paris is heavy hit compared to the suburbs’ average of € 3,150. And with rent regulations from August 2015 not having taken effect yet, renting is far from affordable either.

More on this from Nouvel Obs, Huffingtonpost and France TV Info in French.