How to Understand the Reported Property Prices
By Adrian Leeds

I can't stress this enough. Before you read the following article and look at the most current reported property statistics, please learn HOW to understand them so that they will be useful to you.

The property price figures for Paris and the Paris region (Ile-de-France) are reported quarterly by the INSEE, the French National Institute for Statistics and Economic Studies (www.insee.fr). Just this week, the statistics were released for the end of first quarter 2009, about 2.5 months after the closing of the quarter. Given that the properties to which the statistics relate were purchased about three months earlier than the deeds were recorded (the time between the signing of the Promesse/Compromis de Vente and the Acte de Vente), you can assume then, that these figures are already out of date by more than five months.

Other factors that contribute to a variance are:

1) the reduction in the purchase price, which can be attributed to direct payments made to the sales agent (agency commissions) to help reduce notaire fees,

2) the listing of inventory of fixed furniture such as built-ins and appliances and...

3) the under-the-table cash transactions, which are illegal but do occur.

4) Finally, the figures are diluted as they are reported by an arrondissement in its entirety and do not account for differences by neighborhoods or quality of properties.

We know for a fact that the actual market values can be considerably different than those the Chambre de Notaires report based on property searches and visits we perform daily and how those compare with these reported prices. So, when setting out to find your perfect Paris apartment, keep in mind that what really counts are the asking prices of comparable properties!

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Paris Property Price Report...
By Adrian Leeds

Reporting on Paris Property Prices Third Quarter 2009

The property market in Paris and the Ile de France stabilized as of the 3rd quarter of 2009 and an upward pattern gives hope to the property market. The average price per square meter is up from the previous quarter to 6,160€, a 1.4% increase for the quarter, but a one year drop of 7.2% for 3rd quarter 2008. Sales volumes are on the rise again, up 8.1% for resale apartments and 40.2% for new build apartments.

The 6th arrondissement continues to hold first place with 9,380€/m², followed by the 7th with 8,990€/m²and the 4th with 8,680€/m^2. In contrast, the least expensive district in the city is the 19th with 4,890€/m², followed by the 20th with 5,110€/m² and the 18th with 5,420€/m².

The annual increase in Paris of 7.2% for the last quarter of 2008 contrasts with -7.2% the last quarter of 2009. All 20 districts have experienced a depreciation, but three districts stand out as the ultimate winners with a decrease as low as 3.8% in the 1st, followed by 5.2% in the 20th and 5.9% in the 13th.

There is still very little property on the market, as owners hold on to their investments waiting for values to rise again. This, coupled with low interest rates and the bottom of the market prices makes this an ideal time to buy property, but act quickly, as the really good property sells very quickly.

Editor's Note: To read the full report (in French), click here to download the pdf document. We also make available to all our FPI readers a return on investment Excel spreadsheet that will help you make intelligent property purchase decisions. Just click here: Rental_Return_On_Investment