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The notaires* of Paris and its surrounding area (Ile de France) recorded a slightly negative trend of the property market over the 2nd quarter 2013. In the “Ile de France” region, property price decrease by 0.6% in the second quarter* compared to the 1st quarter (flats: -0.7%, houses: -0.3%) while the trend stands at -1.2% over a year.

 

Paris:

Despite a decrease by 1.9% over a year and 1.1% compared to the 1st quarter 2013, prices remain very high in the French capital with an average 8.200 euros m2. The Paris market topped last year in August at 8.400 Euros m2. There has been significant variation from one “arrondissement” to another over the past year:

  • 1st  arrondissement : 9 930 €/m² (-7,7 % since a year ago)
  • 2nd  arrondissement : 9 590 €/m² (+1,6 %)
  • 3rd  arrondissement : 10 080 €/m² (stable)
  • 4th arrondissement : 11 590 €/m² (+3,2 %)
  • 5th arrondissement : 10 380 €/m² (-5,5 %)
  • 6th  arrondissement : 12 000 €/m² (-8,8 %)
  • 7th arrondissement : 11 770 €/m² (-4,6 %)
  • 8th arrondissement : 10 000 €/m² (-3,6 %)
  • 9th arrondissement : 8 600 €/m² (-2 %)
  • 10th  arrondissement : 7 680 €/m² (-0,8 %)
  • 11th arrondissement : 8 210 €/m² (-1,5 %)
  • 12th arrondissement : 7 920 €/m² (+1,3 %)
  • 13th arrondissement : 7 750 €/m² (-1,3 %)
  • 14th arrondissement : 8 520 €/m² (-0,5 %)
  • 15th arrondissement : 8 680 €/m² (-1,6 %)
  • 16th arrondissement : 9 320 €/m² (-2,9 %)
  • 17th arrondissement : 8 360 €/m² (-2,6 %)
  • 18th arrondissement : 7 310 €/m² (-0,7 %)
  • 19è arrondissement : 6 670 €/m² (+2,9 %)
  • 20th arrondissement : 6 870 €/m² (-0,8 %)

The most expensive areas are located in the 6th arrondissement (Saint Germain des Prés: 12.310 Euros/m2) and in the 8th (Champs Elysées: 12.110 Euros/m2), while the cheapest are located in the 18th (La Goutte d’Or at 5.880 Euros/m2 and La Chapelle at 5.990 Euros/m2).

On average, larger flats tends to cost more, e.g. a 3 bedrooms average price worth 8.711 Euros/m2, versus 8.216 Euros/m2 for studios and 7.986 Euros for one bedroom. However prices increased slightly for a one bedroom over one year by 0.5%. Overall number of transaction was up 5% compared to the same period of the previous year, although activity remains significantly quiet compared to the previous years (e.g. 2011, and years before 2008).

Based on the recently signed preliminary contracts (“compromise de vente”) the Paris notaires have calculated that the average price (at the signature of the final contract “acte de vente”) should slightly go down to 8.160 Euros/m2 in October compared to 8.200 Euros/ m2 at the end of June.

 

“Petite couronne” (first suburban belt, including “départements” number 92,93,94):

Prices over the first belt have remained stable. In the “Hauts de Seine” (département 92) it remained above 5000, at 5.350 Euros/m2 (-0.2%), however prices vary widely from one town to another. Overall stability was also recorded in “Val de Marne” (94) at 4.250 Euros/m2 (-0.1%) and “Seine Saint Denis”, 3.250 Euros/m2 (-0.1%). Number of properties sold was up by 11% in Q2 2013 versus a year ago.

Average house price stands at 354.000 Euros over the 1st belt (stable), again trend varies depending on location: Vitry-sur-Seine recorded the biggest drop (-19.2% over a year) with an average price at 320.000 Euros, while Antony recorded the highest rise +7.4% at 510.000 Euros, reflecting the fact that house prices have been more resilient in the “92”.

 

“Grande couronne” (second suburban belt, including “départements” number 77,78,91,95):

Flat prices decreased by 1% in a year. “Val-d’Oise” (95), “Seine-et-Marne” (77) and “Essonne” (91) recorded the same average price in Q2 2013 at 2.700 Euros/m2. Average house price in the second belt remained stable in Q2 2013 at 280.400 Euros, projection based on preliminary contracts would lead to signed price (at the final contract “acte de vente”) at approximately 281.600 Euros in October. Second hand houses (i.e. houses not newly built) recorded a notable increase of transactions by 16%, while the number of transactions on newly built houses was down significantly by 16%, with a drop of 40% in “Seine et Marne”.

In Paris and Ile de France prices have increased by nearly 300% since 1996:

According to the notaires, prices have nearly tripled between the 1st quarter of 1996 and the 2nd quarter of 2013. However, it is useful to remember that 1996 was near the lower point following the property bubble in the late 1980ies and the property crisis in the early 1990ies. Price rise has been particularly compared to 7.986 Euros/ m2 in 2013 (+367%). Price rise in Paris was the most impressive between 2002 and 2007 when prices doubled in 5 years for studios and one bedroom. Outside of Paris the sharp increase is also impressive though to a lesser extent (+279% on average for a 3 bedrooms between 1996 and 2013.

Is there a first impact of the capital gains reform?

Please refer to the last paragraph of our previous post (slight upswing in French property market but not yet a recovery), also refer to our posts on the capital gains tax reform (“capital gains tax on French property, latest updates“, and “capital gains tax on French property latest updates (part 2)” and “French property capital gains tax: calculator for the September 2013 reform”).

*As a reminder, the notaires data derived from the final acquisition contract (“acte de vente”) which is signed on average 3 months after the preliminary contract or “compromise de vente”. Therefore this moderate trend reflects negotiation finalised during the 1st quarter 2013. The notaire database is very exhaustive as it records all property transactions in France. The data are the most reliable, but it is good to remember that they represent the negotiations of the 1st quarter,  you have to take that into account when comparing with data disclosed by estate agents networks, which are related to the “compromis de vente” and therefore will appear in the notaires statistics several months later. Additionally the agent networks tend to disclose their data quicker, however they only give a partial view of the market trend. All prices data stated in this article are for “old properties” (i.e. not newly built properties).

You can access the latest survey on the Paris property market (in French):

http://www.paris.notaires.fr/actualites/le-marche-immobilier-paris-bilan-du-2e-trimestre-2013-et-perspectives