Hanging Out for a Lower Paris Price

HANGOUTS

Jeff Steiner of Americans in France “hung-out” with me this week to ask about my petition to amend Paris’ short-term rental laws.

In Summary:

Adrian explains her petition and who it is addressed to, mayor of Paris Anne Hidalgo. Adrian feels the present law is unconstitutional because it don’t give the right to housing to someone that rents for less than one year. In cities of more than 200,000, rental agreements for second homes must be for one year or longer.

Adrian goes on to say that this issue impacts both tourists renting for a few days or weeks and those looking for a permanent place to live or need temporary housing. In other cities the minimum is one month not one year. The law dates to 1948, but wasn’t enforced until 2005 when then Paris Mayor Bertrand Delanoë moved enforcement to the mayors office for political reasons. Once this became public people started to report on neighbors.

Adrian states that the present law as it is enforced does not offer a global perspective and is not enforced reasonably. The SPLM (Syndicat des Professionnels de la Location Meublée) would like to have the law amended so that a person could offer their first second home for short-term rental.

Adrian ends by stating people can write a letter to the mayor of Paris and that she understands the housing problem in Paris, but feels the issue of rental length should be left in the hands of homeowner associations and not the city. This law applies to other cities in France of over 200,000 but isn’t being enforced. Adrian is interested in making this fair for everyone.

“You can’t have a happy tenant, if you don’t have a happy landlord.”

Sign the petition!

Watch the “Hang-Out.”

PRICES ON A DOWNHILL SLIDE IN PARIS

Special Note:

It is extremely important for you, as a buyer, to understand the following Chambre de Notaire property sales and price report and why the figures are NOT true to market value.

Don’t let the figures fool you. In addition to the figures being out-of-date (as it takes at least three months from the offer being made to closing and now with new regulations, it can easily take six months), the selling price is often net of agency fees, the furnishings deducted from the selling price, there is ‘cash under the table’ (which is illegal, but done) and the figures use a median, rather than average of the quality of the properties in any one given area.

As in any case, the comparable properties for sale on the market are the true indicators of price! And of course, it’s still based on ‘what the market will bear!’

If all the elements of the property are in favor of a strong price and strong resale value (location and characteristics), then your investment is likely a solid one over a period of time, regardless of the Chambre de Notaires’ statistics.
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It’s a downhill slide for real estate in Paris according to the Chambre de Notaires de Paris as published this past February 26th reporting on 2014, with an outlook for April 2015. The level of sales remains low, even if there was a slight increase in Paris, and lower prices, still modest in the capital, should continue.

In Paris, the price per square meter fell under 8,000 euros in late December 2014 to 7,960€/m² (-2.1% YOY [year over year]). Moving from 8,440€/m² late September 2012 to 7,960€/m² in December 2014, prices in the capital have decreased from 480€ in two years (-5.6%). This decrease is expected to continue in the coming months.

The districts of Paris have generally experienced price declines in Paris between -0.2% and -7.4% (down more than 6% in the 2nd, 4th, and 7th arrondissements). Only the 5th, 8th and 9th districts have increased.

Four districts are still above 10,000€/m²: the 4th, 5th, 6th, and 7th arrondissements, against eight districts at that level two years ago. The most expensive borough is still the 6th (11,710€/m²) and the lowest is still the 19th (6620€/m²). At this moment, the lower-priced districts have better resistance to maintaining their values.

The east side of Paris still more affordable — the 11th district (8,150€/m²), and not surprisingly, the lowest-priced districts of the capital are all located in eastern Paris: 19th and 20th arrondissements head (less than 7,000€/m²), followed by the 18th, 10th, 12th and 13th arrondissements.

The least expensive neighborhoods under 6,000€/m² are Pont de Flandres (5,690€/m²), the Goutte-d’Or (5,920€/m²), Villette (6,140€/m²) and La Chapelle (6210€/m²). Note that over five years, prices in these neighborhoods have experienced price increases ranging from 16.6% to 33.2%.

The most expensive neighborhoods of the capital are Odéon (13,970€/m²), Invalides (13,670€/m²), Saint-Thomas-d’Aquin (12,670€/m²) and Currency (11,920€/m²). While the prices have fallen year to year in Odeon, Saint-Thomas-d’Aquin and Monnaie (between -1.8% and -7%), prices increased 12.1% in 2014 in Invalides.

Lower prices are expected to continue. Using the leading indicators of the Paris notaries on pre-sale contracts, prices are expected to reach a low of 7,840€/m² late April 2015 in Paris.

The Paris market activity levels experienced a slight improvement in 2014, but at a very low level. Thus, the transactions of resale apartments in Paris rose slightly (+ 2%) from 2013 to 2014. However, with 28,660 sales recorded in 2014, the level of activity remains low. The volume of sales is 25% lower than the average of 38,320 sales in the years 1999-2007.

The outlook for 2015 remains complex. The Paris market, like the French market, will depend on a return of confidence in national and local economic factors and in a continual low interest rate environment. The Paris market is clearly again favorable to purchasers. The interest rates on mortgages are exceptionally attractive, but there is still a ‘wait and see’ approach by potential buyers. If the reduction in rates and price declines restore the purchasing power for Parisian households, many acquirers are concerned they will buy too early or too expensively.

View the digital press kit.

View our map of property prices.

Download the Dossier de Press in PDF. 

Download the price per square meter of 80 neighborhoods of Paris.

A bientôt,

Adrian Leeds

Editor, French Property Insider

Email: [email protected]

 

 

   

P.S. Join us once again for a FREE Financial Forum & Economic Update, on Thursday, April 23rd, 2015, from 6 to 8 p.m. sponsored by the Adrian Leeds Group with presentations and Q & A by Dunhill Financial.

Learn more at Conferences and Workshops and please register in advance by visiting: dunhillfinancial.be/events.html