Paris Property Prices “Down” to an “Increase” of 17%!

According to the latest report by the Chambre de Notaires de Paris, the volume of sales decreased in the Ile-de-France by 10% from September to November 2011 over the same period in 2010. The annual rate of price inflation continues to decline — now 10.3% at the end of November 2011 compared to 10.8% one month prior and 12.9% in the spring of 2011.

The Paris market has contributed significantly to the downward trend in activity, with a decline in sales of 13% over 2010 and 22% over the period of September to November 2011, but the shift in sales has not extended over the whole region. All departments without exception show transactions to have decreased compared to the same period last year. The decrease ranges from 5% in Seine-Saint-Denis to 17% in the Hauts-de-Seine department.

The price of a resale apartment in Paris that has been stagnant for past months is has now increased to 8,390€/m2 compared to 8370€/m2 over the previous two months and for the Ile de France, this has risen to 5,560€/m2. The latest projections of prices are calculated by the Chambre de Notaires de Paris based on the pre-sale agreements. They indicate a slight decrease in Paris property prices to between 8,200€/m2 and 8,300€/m2 by the end of March 2012. While Paris has seen increases along with the Hauts-de-Seine (+0.3%) and in the Yvelines (+0.4%), prices are down in other departments — from -0.3% in Seine-Saint-Denis to -1.9% in Seine-et-Marne. Homes across the board are seeing declines, with the exception of the Hauts-de-Seine and the average price of a house is 311,300€..

Paris is experiencing the most significant slowdown with the annual increase being reduced to 17% instead of 19.3% two months ago. The adjustment is less in the inner suburbs (Petite Couronne) (10.1% against 10.4% in October 11.5% in September) and the outer suburbs (Grande Couronne) (5.2% against 5.6% in October and 6.0% in September).

Editorial:

Still, keep in mind that an increase of even 17% indicates a strong and healthy market. We have seen that since the change in the capital gains tax laws (February 1, 2012), fewer properties are being placed on the market and prices have seriously increased. The projections by the Chambre de Notaires doesn’t take this into account, nor did the politicians who supported the change in the law!

While the city is trying to find more affordable housing, this plan to find more tax by increasing the period from 15 years to 30 years before no capital gain tax is assessed, is already defeating their purpose — as the result is that homeowners will hold on to their property longer reducing supply and therefore increasing value. With a decrease in sales, the state will also decrease its tax revenues (5.09% on every property transaction) and may have easily ‘cut off its (proverbial) nose to spite its face’ — so it wouldn’t surprise me if the law will be revised or reversed in the coming years as they recognize their folly.

A few hot properties from our finest agents in Paris and Nice:

NICE – CENTRE VILLE

Minutes from Place Masséna and Vieux Nice in “Nice Centre,” this two- room, 37m2 apartment, is on the last floor of a beautiful old building with a south-facing balcony and has been completely renovated for immediate occupancy or rental.

Asking Price: 250,000€ + 3% Finder’s Fee 

PARIS – LE MARAIS

Just near Métro Saint-Paul on rue Ferdinand Duval in an 18th-century building on the second floor, this two-room 34m2 apartment has a big living room with two windows of western exposure, an open kitchen, a bedroom on the courtyard and is sunny and quiet.

Asking Price: 420,000€ + 3% Finder’s Fee 

For more information about these properties and others in either Paris or Nice, email [email protected].

A bientôt,

Adrian Leeds
Editor, French Property Insider

Email: [email protected] 

P.S. “Le Matisse” in Nice is ready for rental! Visit Le Matisse for more information and Le Matisse Photos for an array of photos.