Wednesday, July 28, 2010

Rising prices in Paris

The French capital could actually experience a 10% increase. In spite of the economic crisis, older properties prices have risen by 2.5% in the region of Paris in comparison with the last quarter of 2009. According to the Chamber of Notaries, this strong increase could be an early warning sign of another sharp rise in real estate, confirming once more that real estate prices are growing faster than the average income.

According to Mr Delasalle, chairman of the commission on real estate condition, it is currently easier to find a buyer than a tenant, and Paris itself expects an important rise beyond 10%.

The average price of older apartments in the region of Paris (4,550€ per sqm in the first quarter of 2010) has come close to the 2008 record (4,730€ per sqm). The rise is even stronger in Paris itself (3.2%) where the first quarter's price (6,430€ per sqm) is very close to the peak of the summer of 2008 (6,620€ per sqm). As for houses, in spite of a 2.13% increase, the average price (280,400€) remains far lower than in 2008 (311,400€).

This evolution in older properties prices echoes the one in new built properties: in the first quarter, the price of flats has risen by 6.8%, the price of individual houses by 1.8%. For Mr Delasalle, this Parisian phenomenon is slowly but surely spreading to the entire country.

For Mr Lefebvre, chairman of French notaries, the real estate sector is one of the few to stay afloat. The reason is that the demand is more important than the offer, and that bricks and mortar are still considered by the French as a safe place to invest.
(ArticlesBase SC #2822827)

Matthieu Cany - About the Author:
Matthieu Cany is Managing Director of Sextant French Property