How Paris Property Stacked Up from First Quarter 2009 through First Quarter 2010
By Adrian Leeds

The report is out on the quarterly statistics for the property market in Paris and the entire Ile-de-France region for First Quarter 2009 through First Quarter 2010.

I can't stress this enough. Before you read the following article and look at the most current reported property statistics, please learn HOW to understand them so that they will be useful to you.

The property price figures for Paris and the Paris region (Ile-de-France) are reported quarterly by the INSEE, the French National Institute for Statistics and Economic Studies (www.insee.fr). The statistics were released for the end of first quarter 2010, about two months after the closing of the quarter. Given that the properties to which the statistics relate were purchased about three months earlier than the deeds were recorded (the time between the signing of the Promesse/Compromis de Vente and the Acte de Vente), you can assume then, that these figures are already out of date by at least five months.

Other factors that contribute to a variance are:

1) the reduction in the purchase price, which can be attributed to direct payments made to the sales agent (agency commissions) to help reduce Notaire fees,

2) the listing of inventory of fixed furniture such as built-ins and appliances and...

3) the under-the-table cash transactions, which are illegal but do occur,

4) and finally, the figures are diluted as they are reported by an arrondissement in its entirety and do not account for differences by neighborhoods or quality of properties.

We know for a fact that the actual market values can be considerably different than those the Chambre de Notaires report based on property searches and visits we perform daily and how those compare with these reported prices. So, when setting out to find your perfect Paris apartment, keep in mind that what really counts are the asking prices of comparable properties!
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The Chambre de Notaires de Paris report for First Quarter 2010 is 20 pages of charts and analysis in French (naturally). Although the report encompasses the entire region, because our audience is primarily interested in Paris, we will look solely at the City of Light, however, you can click here to download it in its entirety: frenchproperty/insider/Communiquedepresse27mai2010.pdf

In regard to the Paris property market, the report reiterates exactly what we've been talking about the last few issues of French Property Insider -- there is so little product on the market and lenders' offerings are so enticing that there is high demand and limited supply. This means that sales are strong and there is no negotiation on price. (Remember, a seller is morally obligated to accept asking price, therefore you eliminate all risk that the offer will not be accepted when paying full price.)

For the first quarter, the volume of sales is up by 5.2%, prices are up by 3.2% and for the year, up 1.7%. This is another reason buyers are scrambling to find properties before prices escalate even further.

 

 

The districts experiencing the greatest price increases are those that had the most room for growth: the 5th (5.9%), 20th (4.5%), 2nd (4.2%), 12th and 18th (4%). A few districts saw a downturn in prices -- those which had already been over inflated: the 6th (-5.5%), 7th (-3.6%) and 4th (-0.1%). None of this is very surprising, and is in fact quite natural for the different areas of the city to become a bit more balanced overall.

The 6th district continues to remain Paris' most expensive (9,550€/m2), followed by the 7th (9,330€/m2) and the 4th (9,160€/m2). Again, I'd like to remind you that you will unlikely see these per meter prices on a property in these districts you would be willing to own!

For example, in the last two months, our own clients have purchased property as follows:

rue Charlot	3rd	12,000€/m2
boulevard Beaumarchais	3rd	10,500€/m2
cour Bérard	4th	11,700€/m2
rue Mouffetard	5th	12,200€/m2
rue Buci	6th	14,200€/m2
avenue Bosquet	7th	12,200€/m2
rue Taillandiers	11th	8,200€/m2

As you can see, the reality of today's prices does not directly relate to what the Chambre de Notaire reports, so keep in mind that prices will be higher than the reported averages...and moving up every moment.

Is this a good time to invest in Paris. "Mais oui!" But, even if you have to trade off one asset for another, as it is when the inventory is limited, your investment will rapidly grow, while your mortgage payments will stay low!