Paris is “Less Shiny” Than in the Past?
Volume XIX, Issue 17
I know it’s hard to believe, but according to Le Parisien, real estate prices in Paris are down in all districts. This is because the restrictions linked to Covid-19 have made the capital much less desirable…in particular for couples with children who preferred to leave to acquire a housing with more space and greenery. The result as many predicted…prices are falling.
So, the news on the street is that Paris “brille moins”—or is less shiny. The drop in prices observed over the past year by MeilleursAgents.com, proves it. Between April 2020 and 2021, prices fell by 2.9 percent. The smaller apartments suffered a little less (-2.3 percent in one year) than the larger ones (-3.7 percent). These figures are perfectly consistent with a study that the site launched in early March (conducted from March 4 to 8, 2021 among 1,406 individuals who have made an online estimate and who have declared a project to buy or sell imminently or within six months). If 24 percent of French people said they wanted to change regions or cities since the beginning of the Covid-19 pandemic, this resulted in an increase of 35 percent specifically concerning Parisians.
With the closure of bars, restaurants, museums, theaters, cinemas…everything that makes up the charm of the capital, has disappeared during this period of confinement. The cramped conditions, the noise and the lack of greenery are still there, prompting many households to reconsider their plans. I concur, although my own observation is that the noise is considerably reduced with less traffic and less life on the streets (For example, I certainly don’t mind that the bar down the street from me is not open and keeping me awake nights!)
The fact remains that at an average of more than 10,200€ per square meter, buying in Paris is not within everyone’s reach. Of course not. This holds true for most major capitals and important metropolises across the globe such as New York, London, Los Angeles, etc. We all pay for location, location, location…and the authorities who would like Paris to be as inexpensive as lesser cities are dreaming. That will never happen, even with this slight blip in the data.
One young couple the article cited explains that instead of buying in Paris, they bought an inn with five guest rooms in Sassetot-le-Mauconduit (Seine-Maritime) where they know that they will lose in cultural activity, but we will gain in quality of life. Thanks to the resale of their 40m2 apartment in Paris for 450,000€, they were able to buy their new jewel for 400,000€. That’s the trade-off they are making for sure, by giving up Paris for the countryside.
At Pap.fr, it also noted a lack of interest in Paris. Over the last quarter of 2020, searches for property in the capital city have decreased by 12.6 percent, while at the national level they have increased by 38.9 percent over the same period. Telecommuting is what changed the landscape—nearly 78 percent of Parisians can now work remotely and for 43 percent of them, it has made them change their plans for the future.
The most marked decreases are clearly on the larger properties. That means that it is especially the families with children who left Paris, because as soon as you want three bedrooms, you quickly reach the million euro mark. However, for the same budget, the Ile-de-France region offers these families much greater real estate purchasing power with double or even triple the surface area.
Some residents who owned second homes in the countryside took refuge there during confinement and then couldn’t imagine moving back to the city without outdoor space, with the noise and pollution. The advantages of Paris were no longer obvious to them and their children who became accustomed to and loved the open spaces. My guess is that of course, this is for now. When life goes back to normal, Paris will be the Paris we all know and love. They may find themselves not wanting to be so far from all the cultural activity.
With the falling prices, is this the time to buy in Paris? Some arrondissements have lost a lot, such as the 3rd (-4.9 percent), the 4th (-4.4 percent) and the 5th (-5.2 percent). But at more than 12,700€ per square meter, it is difficult to talk about good deals. However, with future plans for the first four districts to eventually become pedestrian—which will bring the price of property up in central Paris—I’d say that yes, this is an excellent time to invest in the capital, particularly in the districts where prices have fallen the most.
On the other hand, certain districts such as the 13th, 19th and 20th continue to post prices below 10,000€ per square meter. The real estate market has a strong inertia and prices are not going to collapse, especially in Paris. There are good deals all the time, so there are no good or bad times.
The secret is to take your time and buy the right property. We can certainly help you do that, in Paris or anywhere else in France, for that matter.
The Adrian Leeds Group