Prices in Paris are Squared Up

PRICES ON THE RISE IN PARIS AND THE ILE-DE-FRANCE REGION

Prices continue to rise in Paris and the Ile-de France according to the latest figures published by the Notaires de Paris Ile-de-France, even at the end of August 2016, the volume of sales did not wane. The month of August 2016 was particularly dynamic. This trend is expected to extend into September.

Note: the following Statistics are calculated on sales observed over three months from June through August.

Nearly 46,600 resale homes were sold from June to August, 2016. The increase in activity was slightly more pronounced for homes (+ 13% in the period) than for the apartments (+ 7%). Sales volumes were higher by 9% compared to the same period in 2015, where activity had already begun. They remain slightly down (-2%) compared to the excellent sales volumes between 1999 and 2007.

Prices on resale homes in the region increased by 1.8% in one year, with an increase of 2% for apartments (€5,400/m²) and 1.4% for houses. This upward movement is expected to continue in the coming months. Paris now displays a price per square meter up 3.3% in one year, or €8,270/m2 a of August, with the increase being more moderate in Petite Couronne for apartments (+ 1.4% in one year). Further, in the Grande Couronne, the prices of the apartments are still stable.

It is the recent period that creates the upward trend. In August the prices of apartments in the Paris region gained 2% and 3.6% on homes, but the correction of the seasonal variation moderated this uptrend to 0.7% for apartments and 0.8% for homes in three months. Traditionally at this time of the year, prices are directed upward, especially for homes. It is indeed a period of strong activity for a change of residence. This upward movement is expected to continue in the coming months.

Based on on the preliminary contracts, indicators confirm that the erosion of prices from past recent years will be erased in Paris by the end of 2016. We could see a price per square meter of €8,500 by December 2016 in the capital and show an annual increase of 6%. Although that less assertive, elsewhere in the Region, the annual increase will be close to 4% for Petite Couronne  apartments and houses in the Grande Couronne and 3% for apartments in the Grande Couronne.

Read the entire report (in French) by downloading the PDF.

LA LOI CARREZ — THIS DOES NOT MEAN “SQUARE,” BUT HAS A LOT TO DO WITH BEING JUST THAT!

Don’t confuse “La Loi Carrez” with being “carré,” or square, but it does have heaps to do with square meters. The Loi Carrez is a measurement that is used to calculate the habitable surface area of the property. By strange coincidence, the law that was enacted in December of 1996 is named after the author, Gilles Carrez and has nothing to do with the word for square — carré.

The effective usable surface area, known as the “superficie Carrez,” is the total enclosed floor area of an apartment or other construction discounting walls, partitions, staircases and stairwells, piping and electricity conduits and ducting, window and door embrasures. Parts of the enclosed area which are of less than 1.8 meters (5.9 ft) in height are also excluded. This means that in some spaces, there may be much more surface area than Carrez, which is considered the only true habitable space.

Lots, or fractions of lots of surface areas of less than eight square meters (86 square feet) are also excluded from the calculation of habitable surface area. Typically, servants’ quarters (chambres de bonne) would fall into this category. Cellars, garages, parking places, and other storage facilities sold as separate lots are also excluded.
 
The law does not require measurement to be done by a professional. But given the complexity of the measurement and the penalties provided by law, the use of a trained professional is highly recommended. In case of inaccuracy of the area indicated in the deed of sale, the purchaser may have a claim for price reduction if the actual surface is lower by more than 5% than that expressed in the Acte de Vente. This action must be brought up within a period of one year from the signing of the deed of sale.

Only the seller (which levied the property sale price) is liable for the return of part of the sale price. If the seller has a professional diagnostician to calculate the surface, the seller may attempt to make the professional responsible. The buyer may also request the annulment of the sale if the true surface doesn’t match up.

A bientôt,

Adrian Leeds
The Adrian Leeds Group

Respond to Adrian: [email protected]

 P.S. There will be no French Property Insider issue on Thursday, November 24th, for Thanksgiving! We’ll be busy eating turkey! Hope you will be, too.