How Expensive is Property in Paris?

Property prices are amazingly stable in Paris at the moment. The average price per square meter in Paris has risen only a mere 20€ from last quarter of 2013 to the first quarter of 2014 — 8,160€. And indicators from the Notaires de Paris based on the pre-sale agreements are predicting it to fall to about 8,100€ in the next month. Prices are down overall, however, having fallen 1.6% this past year and 3.3% since the third quarter 2012 when it reached a high of 8,440€.

The most expensive district in the capital is the 6th arrondissement (11,820€/m2), followed by the 7th (11,410€/m²), then the 4th (10,740€/m²) and then the 5th (10.320€/m²). The 1st and 3rd districts follow suit, but fall below 10,000€/m².

The most affordable districts are the 19th arrondissement (6,670€/m2) and the 20th (6,940€/m²). Note that prices rose 5.4% in the 10th district and 2.7% in the 4th arrondissement. In addition, six arrondissements have experienced price declines between March 2013 and March 2014 by more than 5%: 1st, 6th, 7th and 16th.

When considering specific neighborhoods, the most expensive in the capital are Saint-Tomas Aquin in the 7th (13,540€/m²), Odéon (12,400€/m²) and Monnaie (12,270€/m²), both located in the 6th arrondissement.

The most affordable neighborhoods are located in the 18th, 19th and 20th arrondissements. First, La Chapelle (6,150€/m²), La Goutte-d’Or (6,330 euros€/m²), Pont de Flandre (6,380€/m²) and Saint-Fargeau (6,420€/m²). Note, however, that these areas have experienced very strong price increases in the past five years: 47.1% over 5 years for La Chapelle, and 39.1% for the Goutte d’Or for example.

City officials want Paris prices to decrease. They want the City of Light to be affordable for its residents. But what does the decline of real estate prices mean to the economic health of the city and its residents?

In this morning’s news, “the French government is facing a €14 billion shortfall in its public finances after overestimating a projected increase in tax revenues for the last financial year by almost half.” (france24.com/en/)

French President François Hollande’s plans to increase taxes backfired because expected growth was .5% less than predicted. A drop in household spending reduced VAT revenue, thanks to higher unemployment, lower household incomes and consumption. This is proof that “overtaxing actually causes tax revenue to fall.”

With a decline in income, properties remain on the market longer or sell at lower prices, further reducing the tax revenues on the sale of properties as well as affecting the entire real estate industry.

My guess is that this is a good time to buy! While the market is low and the current administration is still blind to its folly. Once the economy improves, so will prices in the City of Light.

A bientôt ,

Adrian Leeds

Director of The Adrian Leeds Group, LLC

Respond to Adrian: [email protected]

P.S. Own a fraction of an elegant studio on Ile de la Cité, right in the center of Paris. Located on a charming side street on the island, “Le Notre Dame” has been entirely restored to include its original centuries-old wood beams, fireplace and antique touches. Shares begin at as little as 14,900€ per two week share and are sold as two two week blocks. The developer is willing to offer his own form of financing, too! Visit Le Notre Dame for more information.