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Paris Prestige Apartment

Since 2015, prices have risen in Paris by more than 17%. According to the last projections of the notaries, they had to exceed the 9600 € / sqm on average in Paris in the 4th quarter of 2018, an increase of + 21%! This was indeed the case; and in March 2019, we have just exceeded 10,000 € /sqm. In comparison, the rise in inflation over the same period was in the order of 2 to 3%. More than half of the boroughs in Paris have average prices of more than € 10,000 / sqm. When you are looking for a property in a lively borough, shopping, easy access to the center of Paris and no major defects, do not expect to pay less than 10 000 € / sqm. This barely sustainable situation for buyers may be behind the slowdown in real estate prices in Paris in 2019.

The main thermometer of real estate is consumer confidence in the economic future. It is indeed difficult to project into a real estate acquisition sometimes involving you in 20 or even 25 years. Since 2018, even though the index of confidence remains positive, it continues to deteriorate in France.

We are seeing an increase in the stock of products, which has not been the case since 2015 and a slowdown in demand in Paris. Even today, in the Parisian market, customers are fighting for good quality goods that can thus be sold in a day at very high prices. It is for this reason that we believe that the rise in property prices in Paris in 2019 will slow down but should not be seen as the premise of a possible decline in real estate prices in Paris.

But in parallel, the rates are still very attractive. Indeed, even if the trend is a slight recovery, which in our opinion should not continue, mortgage rates remain at historically low levels affecting very little purchasing power of buyers. From an economic point of view, even if countries like Germany show signs of tiredness in terms of growth, France is still recording a rise which should make it possible to end the year at 1.5% of GDP growth. Nothing extraordinary in short, nor anything catastrophic. And even if a discontent with a loss of purchasing power symbolized by "yellow jackets" rises in France, as shown by the news, this problem affects much less well-off classes for the Parisian market. Finally, Paris remains a very attractive city. Given the instability of countries such as the United Kingdom against Brexit, which pushes many French to return to Paris or the boost that the French government multiplies to bring back the high income in France, the fall in prices of real estate in Paris is not yet relevant.