The notaires, officials who handle property transactions in France, recently issued their analysis of the Paris property market during the first quarter of 2015. The volume of transactions increased compared with the first quarter of 2014 but prices fell slightly. The 2nd quarter of 2015 shows signs of increasing activity.
6,830 sales of period apartments were recorded in Paris during the first quarter of 2015. This is an increase of 2% on the first quarter of 2014.
The median price, i.e. the middle price in the range of sales recorded, dipped below €8,000/m2 to stand at €7,910/m2 at the end of March, a drop of 2.9% over a year. However, the notaires predict that this will rise again to €7,950/m2 in July.
It’s worth noting that considerable price variation exists among arrondissements and neighborhoods and prices are much higher than the median in some areas of Paris.
The biggest price adjustments took place in the 6th arrondissement (-7.4%) and the 8th arrondissement (-8.9%). The northern part of the 6th arrondissement and the Golden Triangle area of the 8th arrondissement saw extremely high price levels in 2011/12. Even so, despite the current correction, these neighborhoods remain highly priced compared to the rest of Paris. On avenue Montaigne in the 8th arrondissement, which is particularly popular with foreign buyers, luxury apartments can still sell for €25,000/m² or more.
By contrast, apartments in the sought-after central 4th, 5th and 7th arrondissements have maintained their value better. The median price in each of these arrondissements is over €10,000/m2 and upscale apartments in sought-after addresses can go for more than double that.
The report also analyzed the evolution of property prices since 2012 in relation to the number of bedrooms. The prices of very large apartments of four bedrooms or more have dropped by 9.7% since 2012. But studios and one-bedroomed apartments have held their value better, falling by only 2.2% and 2.5% respectively over that period.
Finally, the notaires looked at the proportion of foreign buyers in Paris. This has increased steadily from 6.3% of transactions in 2010 to 8.2% in 2014, and 9.2% during the first quarter of 2015. This indicates growing confidence among foreign investors, who are also benefiting from the fall in the euro. Italians predominated among foreign buyers in Paris (16.6%), followed by British buyers (6.6%).
Market activity was already increasing in April. The volume of property sales in April 2015 was 10% higher than in April 2014. This is partly due to the continuing fall in mortgage interest rates, which were already at historically low levels. Buyers are also taking advantage of the comparatively lower prices.