Paris property sales and prices continued to increase in the 1st quarter of 2017. Buyers took advantage of the very low level of interest rates, and were not put off by the impending presidential elections.

The Chambre des Notaires de Paris (Paris Chamber of Notaries) released their sales data for January through March of 2017. They report that buyers are quick to decide these days, with price negotiations becoming smaller or even non-existent.

Properties that had lingered on the market are now finding buyers more readily. And those that are priced correctly sell within less than two weeks.

Prices close to record high of 2012

The increase in Paris prices that began in the first quarter of 2016 has gradually continued ever since. In the first quarter of 2017, the Notaires-INSEE indexes show that apartment prices rose in Paris by 5.5%. The price per square meter climbed to 8,450 €. This figure falls just short of the record high of 8,490€/m² reached in August 2012.

Thirteen of Paris’ twenty districts recorded gains of more than 5%. The peak increase was + 11.8% in the 8th district. It was more than 7% in the 10th, 11th and 17th. Seven districts now have an average price of more than 10,000€/m². Four of these – the 1st, 4th, 6th and 7th – exceed 11,000€/m².

The notaries predict that by July 2017, the average price per square meter in Paris could approach 8,800 €. This would be an annual variation of + 7%.

The difference between average and record prices

French newspaper Le Figaro reported some of the record prices of Q1 2017. These premium properties sell at prices that are a far cry from the statistical average.

A 108 m² apartment in the Champs Elysees area of the 8th district, for example, sold at 30,560€/m². Another Right Bank record was set in the Porte Dauphine sector of the 16th district, where a 117 m² property sold for 20,450€/m².

Left Bank prices also reached new highs, with two sales in the Gros-Caillou area of the 7th district. One 189 m² property there sold at 29,950€/m² while an 84 m² property sold at 25,300€/m².

Sharp increase in transaction volume

More than 10,000 properties were sold in Paris in the first quarter of 2017. This was the best first quarter since 1991. It marks a 70% increase when comparing the first quarters of 2016 and 2017.

However, this exceptional jump owes much to the weak results of the first quarter of 2016.

Only 6,000 apartments sold then due to the many purchases made at the end of 2015. Buyers wanted to avoid the increase in registration fees that went into effect on January 1st 2016.

Is Brexit impacting the increase in Paris property sales and prices?

Savvy British investors anticipating Brexit are already snapping up property in Paris. They are no doubt also attracted by the pro-business platform of new French president Emmanuel Macron.

French newspaper Les Echos says Britons are the second-largest foreign group buying Paris property. They make up 10% of total transactions involving foreign investors. Only Italians purchase more, representing 17% of the foreign buyers.

What does the future hold in store?

The notaries say that based on preliminary sales contracts, the outlook for Paris property sales and prices in the coming months remains strong. Nonetheless, several factors may counter this.

The slight dip in prices in recent years improved buying power. The rise in prices has reversed this trend. If the small increase in interest rates grows, lower buying power could slow down Paris property sales and prices. Reduced access to credit may become another factor. The tax decisions of the new government will also have an impact if they increase the tax burden on households.

But for the moment, nothing seems able to slow down the increase in Paris property sales and prices. If you don’t want to miss out on this trend, or just want to know more about buying in Paris, please contact us.