From the High Cost of Paris to the Vineyards of Champagne

Monday evening I’m off to the area around Epernay in Champagne for the week to tape our 37th House Hunters International episode. This will give me (and you in next week’s French Property Insider) the opportunity to learn more about the region and the real estate there.

I was first introduced to the region about 12 years ago when I assisted author of “Demystifying the French” Janet Hulstrand and her husband buy a chalet-style home in the town of Essoyes where Renoir once lived. Essoyes is located in the southern part of Champagne, south of the city of Troyes, while Epernay is in the northern part of the region, south of Reims, less than a two-hour drive between the towns.

I have gotten to know the area around Essoyes fairly well thanks to Janet and the many times I’ve spent there with her and on my own, as well. Epernay will be new to me, but I am sure to learn a lot next week as we explore it with the “contributors” and the production crew.

It will be interesting to see if we can teach everyone to pronounce “Reims” correctly! While it looks like this: reemz, it’s actually pronounced like this: rinse. Does that make sense to you? Of course, not! Try this instead:  youtube.com/watch or this one: youtube.com/watch, but for sure, this one is WRONG: youtube.com/watch.

No matter. I’m sure we will be drinking plenty of champagne during the house tours…or at least AFTER them, while ogling the vineyards along the way (jokingly referred to as “wine plants” by someone on my staff!).

Meanwhile, the Chambre de Notaires de Paris are polishing their nails on their shoulders and gleaming with pride as they review their accomplishments of this past year (2018). Sales of housing stabilized at a very high level in 2018, just 2% below the peak of 2017. The market remained fairly fluid, particularly in the Grande Couronne*, with a rise of prices which slightly decelerated in one year (+ 4.5% for apartments and + 3.5% for houses). Two-thousand-nineteen began with the continuity of 2018 with a good level of activity. However, elements of fragility persisted and left questions about the continuation of these trends.    

*The Île-de-France has a land area of 12,011 km2 (4,637 square miles). It is composed of eight departments centered on its innermost department and capital, Paris. Around the department of Paris, urbanization fills a first concentric ring of three departments commonly known as the Petite Couronne (“small ring”), and extends into a second outer ring of four departments known as the Grande Couronne (“large ring”). The former department of Seine, abolished in 1968, included the city proper and parts of the petite    couronne. (Source: Wikipedia.org)
 
The dynamism of activity has not abated in 2018. After the strong growth in 2017, the real estate market has remained at a very high level in 2018, with 177,500 sales of resale housing in the Ile-de-France (- 2%). Activity increased by 9% compared to the past and excellent period of 1999 to 2007 and especially by 23% compared to the average of the last 10 years, where phases of expansion and recession of the real estate market have alternated.

The annual rise in the price of apartments in the Ile-de-France remained more pronounced in the heart of the fourth quarter of 2018. It amounted to 5,970€/m² at the end of December 2018, an increase of 4.5% in one year. The price of apartments in the region should exceed 6,000€/m² from the end of April 2019 (to 6,040€/m²).

In the Capital, the price increase was reduced from 8.7% in the fourth quarter of 2017 to 5.7% in the fourth quarter of 2018. The price per square meter reached 9,570€ at that date. According to the leading indicators of the Notaries of Greater Paris, the annual rise should still slightly accelerate in the Capital in the coming months. It is expected in Paris to reach a record price per square meter of more than 9,700€ per in April 2019 (9,730€/m²), up about 7% in one year. The price per square meter increased by 21%, i.e. 1,680€ more, in 3.5 years in Paris compared to the “low” point of 7,890€ recorded in the second quarter of 2015.

The most expensive district is the 6th arrondissement with a price of 13,150€/m² at the end of December. The most expensive neighborhood of Paris is Odéon (6th) (17,410€/m²), followed by Notre-Dame (1st) at 15,970€/m² and Saint-Thomas-d’Aquin (7th) (14,180€/m²). The most affordable is the 19th, the only district still under 8,000€/m² (7,930€/m²). Most expensive neighborhood. The least expensive district: La Chapelle (18th) (7,460€/m²), then La Goutte d’Or (18th) (7,510€/m²) and Saint-Fargeau (20th) (7,580€/m²).

Note: the area that has increased the most over the last 5 years is Saint-Merri (4th), which has experienced a price increase of 35.5% over this period!

In the fourth quarter of 2018, the Petite Couronne has occasional price changes quite similar to those seen in the capital, for both apartments and houses. An apartment in the Petite Couronne cost at the end of December 2018, 4,690€/m², or +4.8% over one year, and a house 375,100€, an annual increase of 5.4%. The Grand Couronne showed moderate price developments for homes (+2.6% to 285,700€), particularly for apartments (1% fourth quarter 2017 to fourth quarter 2018, and a price of 2,980€/m²).

There is little change in the size of housing sold in Ile-de-France: 58m² on average for an apartment and 113m² for a house in 2018. At the same time, the structure of apartment sales remained exactly the same, even from 2017 to 2018. Fifteen percent of apartment sales are studios, 29% of two rooms, 30% of three rooms and 26% of four rooms and more. For houses, the share of very large houses has continued to strengthen with 38% of six rooms and more (against 37% in 2017 and 34% in 2015).

The bottom line? While Paris has restrictions on the height of its buildings, prices don’t have a ceiling. Get in while the going is good!

See paris.notaires.fr/fr/ for more information and stay tuned for a tour through Champagne in the next issue of French Property Insider.

A bientôt,

Adrian Leeds
Adrian Leeds Group

(drinking champagne, of course)

Respond to Adrian

P.S. If you have been thinking of making an investment in Paris property, take the plunge as prices are still on the rise and will even surely go higher! Contact us for advice and assistance on finding the perfect property and financing for you. Email [email protected] or complete our consultation form. Do it today!  If you have been thinking of making an investment in Paris property, take the plunge as prices are still on the rise and will even surely go higher! Contact us for advice and assistance on finding the perfect property and financing for you. Email [email protected] or complete our consultation form. Do it today!