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Paris Market Still Going Strong

Volume XIX, Issue 26

Photo of a typical Parisian apartment building

SALES STILL STRONG IN THE ILE-DE-FRANCE

The real estate market in Paris and the Ile-de-France is booming. Activity remains dynamic, with continued strong demand and attractive financing conditions. More than 40,000 homes were sold in the Ile-de-France from February to April 2021—20 percent more than the average for the same period over the past 10 years!

Compared to the period from February to April 2020, marked by the first confinement, activity rebounded by 45 percent, with more vigor for apartments in the inner suburbs (+52 percent) and houses in the inner suburbs (+49 percent). The recovery was a little less marked in the Capital (+35 percent).

In brief, after a lackluster month of February 2021, a consequence of the second confinement, the number of sales increased significantly in March and April 2021. It is up more than a quarter compared to the average of the 10 last years for these two months.

Graphic comparing apartment and house prices in France between 2020 and 2021

As many pre-sale contracts were signed this spring, the increase in sales volumes seems set to continue. The rise in prices could accelerate this summer, except in Paris, where values ​​are staying more stable.

In the Ile-de-France from April 2020 to April 2021, home prices increased by 4.1 percent. The pressure on the home market is confirmed, with annual price increases reaching 6 percent. Paris remains away from the movement, with a stabilization of its values. The price per square meter of resale apartments came to €10,630 in April 2021, without major changes compared to previous months and even in one year (+ 1.1 percent).

According to leading indicators on pre-sale contracts, the price per square meter of apartments should reach €10,720 in August 2021 in the capital, an increase of one percent in three months. This slight upward movement would compensate for the erosion observed last winter and in spring. In one year, prices should stabilize (-0.2 percent) by this time.

Graph of the projected change in apartment prices between April and August 2021 in France

According to our leading indicators, price increases should be faster in the Petite Couronne (5.6 percent) and Grande Couronne (6.1 percent) for apartments. Finally, the strongest annual price increases would continue to be observed for houses (7.4 percent in the Petite Couronne and 7.7 percent in the Grande Couronne).

PARKING FOR SALE

A little more than 100,000 parking spaces were sold in the Paris region in 2020. Most of these sales were in the context of transfers that combine an apartment and one or more parking spaces. Two factors are driving the increase in the number of parking spaces when apartments are sold: the location of the capital which has a dense and varied public transportation network, and the size of the apartments.

The sales described below concern isolated parking spaces* (sold without apartments). From 2000 to 2016, this market fluctuated between 9,500 and 10,500 spaces sold per year in the region. Apart from a brief decline of 8,100 sales in 2009 linked to the subprime financial crisis, this number of sales has tended to increase in recent years with 10,900 sales in 2017, 11,500 in 2018 and a maximum of 11,700 in 2019. The slowdown in real estate activity in the Ile-de-France region linked to the economic crisis has brought the number of sales down to 10,100 in the low range for 2020.

The geographical distribution of sales has also remained very stable for more than 10 years. The share of sales in Paris, which reached nearly 40 percent at the end of the 1990s, has fallen to 33 percent in a few years. It has remained at this level since 2008, whereas one might have expected a further decline, due to the decline in the percentage of Parisians who own a car (their rate of ownership was 34 percent in 2017, compared to more than 80 percent in France and in the Greater Paris area) and to the increase in soft mobility solutions in the capital over the last few years. In the suburbs, the location of single parking sales has not changed, with the Petite Couronne accounting for slightly more than 40 percent of transactions and the Grande Couronne for around 25 percent for more than 10 years.

Graph showing the change in prices for parking/garage space in France over 20 years

According to data from the Notaires du Grand Paris, the average price of a parking space in the Ile-de-France region was €19,000 per space in 2020, with a slight annual increase (+1.6 percent), while the average price was €22,600. Two departments have higher median prices than the region, Paris €27,000 and the Hauts-de-Seine €20,000 per space. The average price is €15,000 in Val-de-Marne and Yvelines, and between €11,000 and €12,500 in the other departments. Over the long term, price increases for parking spaces sold independently are much more limited than those for housing. The price of resale housing has increased by a factor of 2.75 in 20 years in Ile-de-France (175 percent increase), while the price of parking lots has increased by a factor of 1.7 (71.2 percent increase), with greater increases in the Petite Couronne (97.8 percent) and Grande Couronne (65.8 percent) than in Paris (60.7 percent).

In Paris, the average price of independent parking spaces in 2020 still varies considerably depending on the district in which they are located. An independent parking space costs €16,500 in the 13th, €17,000 in the 19th, and can reach €40,000 in the Paris center or 17th arrondissement, €45,000 in the 6th or 8th, €52,700 in the 16th and even €60,000 in the 7th arrondissement out of a few hundred transactions. The market for independent parking spaces is higher than that for apartments in the southern suburbs of Paris (12th and 16th arrondissements), which account for 45 percent of parking lot transactions, compared to 35 percent of apartment transactions.

Many of the suburbs have a market size large enough for analysis, with prices around €20,000. In Neuilly-sur-Seine, it reaches €32,000, the highest price outside Paris. Saint-Mandé follows with €27,000, but on a much smaller market, then Boulogne-Billancourt €25,000. In the greater Paris area, the highest prices are found in the Yvelines at La Celle-Saint-Cloud (€25,000 on a small market) or Versailles (€22,000). The most moderate prices are found in Longjumeau in Essonne (€4,700 on limited volumes) or Noisy-le-Grand in Seine-Saint-Denis (€8,000).

Download the press release in PDF format.

A bientôt

Photo of Adrian Leeds by Erica SimoneAdrian Leeds
The Adrian Leeds Group®

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