Paris Property Predicted to Increase 6% this Year!

Welcome back from Turkey Day! Hope it was as much fun for you as it was for me!

Just yesterday, someone asked me about the average appreciation of property in Paris. The timing was perfect, because the quarterly report by the Chambre de Notaires de Paris just came out. The good news is that 6% is what is predicted for appreciation from late 2016 to late 2017 based on the trends for the entire Ile-de-France.

What I’ve witnessed myself is that property in Paris increases between 5% and 10% annually over time, with highs and a couple of insignificant lows, at least since the lowest period in the market in 1998. Whenever we sign an Acte de Vente, if the price paid at the previous sale is noted in the document, which it often is, I do a quick spreadsheet calculation to determine the annual appreciation. (See this online calculator to make it easy.) The chart beginning in 2005 is a clear indication that even my own estimates have been right.

When you purchase a property in France, the closing costs are approximately 7%, therefore if you own the property at least two years, you should experience at least a moderate appreciation. We believe you shouldn’t go into the market with a plan to “flip” a property within less than five years, if you can avoid it, and any capital gains tax you pay is just that — tax on the GAIN. Therefore, losing on an investment in Paris is almost impossible — that is of course, if you do not over capitalize the property with extensive renovations.

I am personally guilty of this, but only in my Nice apartment. If you think you will own the property a very long time, as I did with this investment, then outfitting it for your own personal pleasure is part of the fun of property ownership. My advice when it comes to investment: don’t under estimate the value of your own pleasure! Life is too short!

Here’s the latest news from the Ile de France Chambre de Notaires (November 24, 2016):
 
– 8,300€ per m² in Paris on average
 
In the capital, the price of apartments at the end of September 2016 reached 8,300€ per m² (up 3.6% in one year).
 
– Price increases above 5% in 8 Paris districts
 
The rise in prices is spreading in central Paris with 8 districts with a + 5% annual increase. The districts with the highest increase being the 3rd (+ 8.6%) and the 10th (+ 10%), followed by the 20th (+ 6.6%). Only the 8th district saw prices decline by 1.1% in one year.
 
-5 districts only less than 8,000€ per m²  
 
While the average price per square meter in the capital is 8,300€ per m², 7 arrondissements have seen their prices surpass the 10,000€ per m² (1st, 2nd, 3rd, 4th, 5th, 6th and 7th). The 4th, 6th and 7th even exceeded 11,000€ per m², the most expensive being the 6th arrondissement at 11,870€ per m².
 
Note: the price of the most expensive apartment sold in Paris in 3rd quarter 2016 exceeded 20,000€ per m².
 
– A district below the 7,000€ per m²
 
The 19th is the only district below the 7,000€ per m² (6,900€ per m²).
 
The price differential between the most expensive district and the least expensive in Paris is gradually shrinking. There are still only 4,970€ per m² in late September 2016 between them.
 
– The most expensive area is the Champs-Elysées with 13,790€ per m²
 
The most expensive neighborhoods of Paris are the Champs-Elysées (8th) with 13,790€ per m², St. Thomas Aquinas (7th) with 13,640€ per m², Saint-Germain-des-Prés (6th) with 12,840€ per m² and Odéon (6th) with 12,390€ per m².  

 
– The cheapest area is Pont de Flandre with 6,330€ per m²
 
The least expensive districts of Paris are Pont de Flandre and America (19th) with 6,330€ per m², followed by La Goutte d’Or and La Chapelle (18th) with  6,410€ per m², and La Villette (19th) with 6,620€ per m².
 
Of the 80 districts that make up the capital, only 6 are still below the 6,000€ per m², a still higher price than the price per m² of the average Paris apartment (5,440€).
 
– 6% annual rise in prices in Paris in January 2017
 
According to the leading indicators of the Paris notaries, the price increase is expected to continue in the capital in the coming months. Thus the price per square meter record in the capital of 8,460€ in 2012 should be exceeded in late January, 2017 (8,500€ per m² expected), an increase of 6.2% in one year.

 
– 10,000 existing homes sold in 3 months in Paris
 
As elsewhere in the region, the Parisian real estate market has confirmed its momentum in 3rd quarter 2016. 10,400 existing homes were sold in the capital between July and September 2016, an increase of 11% year to year.
 
– 8% of buyers in the capital are foreign nationals
 
In Paris, the share of foreign nationality buyers amounts to 7.9%. They are particularly present in the 4th district (20.4% of buyers), in the 6th district (14.4%), in the 5th (12.2%) and in the 16th (12.1%).
 
In 2016, the most represented nationalities among the Parisian buyers are Italians and Chinese.

If you were to ask me where to buy in Paris…that’s still a tough question. Everyone I know loves where they live! The answer is based on your own needs and goals:

Do you want to:

* maximize your investment?
* minimize your risk?
* live in central Paris?
* successfully rent your property for maximum revenues?
* be surrounded by residents rather than transients?

I must say, however, that I’m not unhappy to be an owner in the 3rd district, where prices increased the most, in the central part of the city, one of the oldest areas (Le Marais), that is eclectic and somewhere between bohemian and chic! I didn’t plan it that way — it was just “par hazard,” but I’m not complaining!
 
Download the pdf report (in French).

And let us help you make the choice…

A bientôt,

Adrian Leeds
The Adrian Leeds Group

(by Les Young)

Respond to Adrian: [email protected]

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