The latest notary reports are out, revealing stability in Paris real estate prices. These statistics cover the first quarter of this year.
However, desirable central districts are showing growth with prices actually on the rise.
We take a look at what the first few months of the year say about the Paris real estate market in 2023.
January to March 2023 – the first quarter
It’s an event that happens four times a year. Property owners, investors, and real estate agents wait for the latest reports from the Paris Chamber of Notaries.
These reveal how many Paris properties have sold, and for how much.
It’s our indicator of the current state of the housing market.
While we are not seeing massive growth this first quarter, the good news is we are seeing a stabilization of property prices.
The overall number of sales this quarter – the transaction volume – is around 8,000 properties.
It was always going to be a challenge to beat 2022, which broke records for transactions as the market recovered post-Covid.
So while overall sales are down 18% this quarter from the same period in 2022, when taking a wider view and looking at the average transactions over the past 10 years, this number is average and flat.
To be exact – it’s 1% up.
Stability in Paris real estate prices
The reports indicate that prices in Paris now average 10,310€/m².
This is a nominal decrease of -1.7€ for the quarter, and -2% when comparing year to year. This is a stabilization of the prices, as we reported in the previous quarter.
Prices in the 9th and 16th arrondissements (districts) are essentially unchanged, while the outer areas are showing small declines varying between 1% to 4.5%.
The averages in the reports are just that – an overall view combining all properties in Paris.
But not all the districts of Paris are driven by the same dynamics. Prices are flat in many areas, while in others, they are actually on the rise.
Prices rising in the central districts
Taking a closer look at the different districts reveals growth in the more desirable, central areas of the city.
Prices in both the 6th and 7th arrondissements are showing growth, albeit slightly.
The 6th is still the priciest in Paris at 14,550€/m². That’s an increase of 1.4% for the quarter, and up 3.1% year on year.
Meanwhile the 7th is now averaging 13,810€/m², up 0.1% for the quarter and 3.6% compared to last year.
Invalides is the most expensive quarter in these arrondissements, at 16,810€/m². This is the most impressive increase of all – up 9.6% for the quarter, and up 21.2% for the year.
More price rises seen this quarter
At 14,390€/m², Notre Dame des Champs is up 4.5% for the quarter, and 5.1% for the year. And St Germain des Prés at 16,730€/m² is up 1.7% for the quarter, and 7.1% for the year.
St. Thomas d'Aquin – where the 56Paris agency is located – is at 16,470€/m². This is growth of 0.2% for the quarter, and 4.1% for the year.
The Marais, another very desirable central area, is also showing increases. While the 3rd district is up 2.4% at 12,800€/m², the 4th is now averaging 13 950€, growth of 6.4%.
Reasons for the current trends
There are lots of factors at play.
Rising mortgage interest rates, now exceeding the 3% mark, means there are fewer local buyers. The banks are approving fewer loans, and buyers might feel they cannot afford to buy at this time.
This means less competition in the market, and flattening of the prices. It also explains the decrease in transaction volume.
One notary suggests it’s international buyers keeping the central districts buoyant, saying “The districts whose prices are still rising are those where foreigners are very present”.
This is because foreign buyers can have more bargaining power when their funding is coming from elsewhere, and they are not so dependent on getting a mortgage from a French bank.
This is another topic we have discussed previously in this blog.
Where are prices heading?
There are suggestions from the notaries that the average price could fall below 10,000€/m² this year, perhaps by the third quarter of 2023.
But the question is – where in Paris? If the current trend continues, the central districts may very well continue to see prices rise.
56Paris is here to help
If the stability in Paris real estate prices is making you want to know more about buying an apartment, don’t hesitate to get in touch with our team of real estate experts.