Paris Prices Still on the Rise
It’s the longest day of the year, today, Fête de la Musique all over France and property in Paris and the Ile-de-France Region is still strong and rising, according to the Paris Chambre de Notaires.
The latest figures on the real estate market in Paris and the Ile-de-France Region were published earlier this month with an outlook for July 2018. In the first quarter of 2018, activity on the real estate market has consolidated, while the rise in prices has slightly slowed down. In the first quarter of 2018, the dynamism of the property market continued in Ile-de-France. The volumes of sales of resales are still close to record levels of activity, despite a very slight decline (-3% of activity compared to the first quarter of 2017), which is not surprising, given the level of sales achieved.
In this context, the annual rise in prices has slowed somewhat, particularly in Paris. Activity is expected to continue well into the coming months as the outlook remains closely linked to the level of mortgage credit rates.
In the Petite Couronne, the annual price increases for apartments (at 4,540€/m2) range between 3% and 5% and could also become moderate by the summer of 2018.
In the Grande Couronne, the price per square meter of apartments stood at 2,970€/m² in the first quarter of 2018, up 1.1% year-over-year. Leading indicators on preliminary contracts anticipate a very slight recovery of the increase by the summer (1.6% expected in July).
In all, and due to more moderate developments, observed or expected in Paris and the Petite Couronne, the annual increase in apartment prices would increase from 5% in the first quarter of 2018 to 4% in July 2018 in the Ile-de-France.For home sales in the first quarter of 2018, the price increase was 2.8% in one year. According to advanced indicators by the notaires on the preliminary contracts, it should accelerate to reach 4.5% within one year as of July in the Petite Couronne (to 355,200€), a market that is truly restricted.
In the Grande Couronne for apartments, price increases are more limited, both in the first quarter of 2018 (between 2% and 3% in one year) and on a more distant horizon (+ 2.8% of annual variation expected as of July 2018). The average price of a house in the Grand Couronne was at 280,400€ by the end of March 2018.
In Paris, between the fourth quarter of 2017 and the first quarter of 2018, the price of apartments only increased by 20€ per square meter. It still reached 9,070€/m² at the end of March 2018. The annual rise in the price of Parisian apartments remains stable compared to the level of inflation, but it has reduced to 7.3%, compared to 8.7% in the fourth quarter of 2017. According to the leading indicators on the preliminary contracts by notaires in the Paris region, a price of 9,360€/m² is expected in July 2018, which is still an increase of 6.2% in one year.
Price differences remain significant between the districts – from 7,350€/m2 for the 19th arrondissement to 12,240€/m2 for the 6th.
The highest prices were recorded at 14,490€/m2 in Odéon (6th), 13,740€/m2 in Saint-Germain-des-Prés (6th) and 13,640€/m2 in Monnaie (6th). The lowest price neighborhood is La Chapelle (18th), the only Parisian district still under the 7,000€ mark (at 6,660€/m2), followed by La Goutte-d’Or (18th) at 7,150€/m2 and Pont- de-Flandres and America (19th) both at 7.180€/m2.
The activity of the Parisian real estate market remains globally dynamic. Although it is experiencing a slowdown in certain sectors, other markets, particularly in the Petite Couronne, still record historical records of activity for the first quarter. The market is still based on two factors: the continuation of exceptionally attractive interest rates and fundamental optimism that fuel real estate confidence.
The desire to become a homeowner, to build security in preparation for retirement, the lack of alternative investments, sociodemographic developments, and difficulties to find housing in the Ile-de-France still stimulate demand for the Paris Region real estate market.
Now’s the time to buy!
See the entire report here (in French).
Adrian Leeds Group
P.S. Don’t miss the re-airing of the recent House Hunters International episode, Champagne Problems in Paris: Sunday, June 24. Details on our HHI page. Set your DVRs now!