France’s newspaper ‘Le Monde’ published some outstanding figures referring to real estate in Paris and in its suburban areas.
Paris property prices increased by 20% in 2010
A study carried out by the Chamber of Notaries of Paris and Ile de France published on December 9th revealed an increase of 20% is expected in house prices in 2010, with a new record of approximately 7,500 euro / m 2 on average by the year’s end. According to the notaires, the increasing property prices in Paris “should keep up for the first months of 2011 at least,” reaching a new record of 8,000 euro/m2 on average.
This price boom is mainly related to the capital’s popularity among foreigners with the return on the market of “second-time buyers” and low interest rates. ” Housing demand is very strong and still solvent. What’s more, we are seeing the noticeable return on the market of households who sell their property after making a substantial capital gain from their first purchase in order to make another purchase. “ Foreigners, those looking in the historic centre in particular, are numerous,” declared Christian Lefebvre, President of the Chamber of Notaries of Paris and the Ile-de-France at AFP.
The rise in the city centre of Paris in the third term of 2010 was still only of 13.8% in comparison with the same term in 2009. The average price had then passed the threshold of 7,000 euros/m2 (7030 euros), largely erasing the old record (6680 euros/m2).
At the end of 2010, and for the first time, notaries in Ile-de-France were able to provide statistics based on preliminary contracts referring to real estate, rather than solely on deeds signed a few months after. The previous figure of +20% in 2010 results from a representative panel of preliminary contracts received by notaries for September, October and November 2010. “This first quarterly indicator price (…) from the end of November 2010 foreshadows the index prices of the final sales contracts between November 2010 and February 2011”, declared the Paris chamber of notaries.
In comparison with 2009, the increase in the region of Ile-de-France, just outside Paris, is less strong but will still exceed 10% in 2010, in particular for apartments.
An increase in the provinces
According to the chamber of Paris Notaries, the changes aren’t as significant but are still above inflation rate (1.5%) outside of Paris. In the third term of 2010 and on an annual rate, the increases were 5.3% for apartments and 8.9% for houses. The major regional cities have charted, for their part, a significant increase in 2010, between 10% and 15%: Rennes (2,250 euros/m2), Nantes (2,450€/m2), Bordeaux (2,700€/m2), Lyon (3,000€/m2) and Marseille (2,500€/m2). The increase remains lower in Toulouse (2,350€/m2) and Brest (1,450€/m2)
In large regional cities, “it is the demographic and economic dynamism, notably with the influx of students and the fact that they’re leaving home, which is at the root of the rising prices,” said Pierre Bazaille, President of the Notarial Institute in real estate. However, he points out, “We must bear in mind that the ‘blip’ in property rates lasted longer between the spring of 2008 and 2009 away from the capital than in Paris and a good half of the increase is actually a catch-up in prices. I think the rise in large cities will carry on in 2011, but not at rate of 10% to 15%,” predicts Mr. Bazaille.