Everyone is waiting to know whether there will be a significant effect between Coronavirus and Paris real estate prices.
Now, for the first time this year, we can reveal notarial sales results for early 2020.
We also examine what the notaries predict for the future, as we emerge from this crisis and look ahead to the market’s recovery.
The first quarter of 2020
Each quarter, the Chambre des Notaires de Paris (Paris Chamber of Notaries) publishes the results of property sales in our capital.
This includes the number of transactions, average prices per district, and other important information.
The latest reports from the notaries include data up to March 31st. As this includes only the first two weeks of confinement, it is too early to draw solid conclusions on the real impact of the Covid-19 pandemic.
Also, there is usually a gap of several months between the acceptance of an offer and closing of the sale. This means many of the closings seen in the reports were likely started in late 2019.
However, the news is better than many may have predicted. Confinement not only demonstrated the importance of one’s home, it also highlighted the stability of real estate compared to other types of investment.
Growth of 8% seen this year
Before the pandemic, Paris real estate prices were flourishing. It’s something we previously reported in this blog. Over the last 5 years, apartment prices have gone up 32.3%.
And looking at the first quarter of 2020, property prices are still up significantly over the same period last year.
The new average price is now 10,460€/m², which is growth of 8% year on year. 15 of Paris’ 20 districts now show average prices above 10,000€/m². 16 of them have seen prices increase by over 5% over the same quarter last year.
Although as you would expect during the start of a pandemic, overall transaction volume is down, by 22%.
Those who put their projects on hold during this time, along with the closing of notarial offices for the latter part of March, likely played a part. In addition, Q1 2019 transaction volumes were unusually high due to the demonstrations in Q4 2018.
Good news for real estate investors
Of course, the effect between Coronavirus and Paris real estate prices and volume is undeniable. But despite its impact, the notaries are predicting that growth will continue, with rising property prices expected for the second quarter of 2020.
Current expectations are that prices may approach 10,700€/m² by July, if contracts continue at the same rate. That will be growth of 7.1%.
In the trendy 10th arrondissement, average prices are currently at 10,220€/m².
For an example of a historic property here, look at this three-bed two-bathroom apartment.
A real find, it is the former home of Georges Seurat, the legendary Impressionist painter. Features include ornate moldings, fireplaces, herringbone oak floors, natural light, and even a balcony.
While in the central 7th arrondissement current prices average 13,560€/m², those in the highly desired St. Thomas d’Aquin quarter of the 7th command 14 770€/m². Here our portfolio includes this elegant and spacious property on the quays of the Seine.
Predictions from an expert notary
For a true perspective on what effect two months in confinement made on the market, we will need to wait for the fourth quarter 2020 results.
However, notarial spokesperson Thierry Delesalle tells Parisian newspaper Le Figaro, “While we don’t yet have figures, we do have the impressions of our colleagues and real estate professionals.’
“They are reporting the resuming of activities with many visits, signatures, and the relisting of properties.” We at 56Paris can confirm this high level of activity.
“Certainly,” he says, “we are witnessing a catch-up effect right now. But real estate is one of the first areas to see a dynamic recovery.
“Paris is an 80% owner occupied market, not a speculative one. Therefore, there is not the danger of a real estate bubble.”
He concludes with a solid prediction, “The real estate market will resist, and the price of Parisian real estate will not drop.”
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