The current pandemic has everyone watching the Paris real estate price evolution.
As always, we look to the Chambre des Notaires de Paris (Paris Chamber of Notaries) for the official statistics.The latest reports are for the second quarter of 2020, from April to June.
Continued growth, despite the pandemic
So how has coronavirus affected the Paris housing market?
While it is too early to have the full picture, to date the results from the notaries are surprisingly positive, and good news for property owners and investors.
In the second quarter of the year, the notaries report that real estate prices increased to a new average of 10,690€/m². That is an impressive growth of 8% year on year.
Average prices now range from the more affordable 7,870€/m² in Pont-de-Flandre in the 19th arrondissement (district) up to 17,130€/m² in the Odeon quarter of the 6th district.
The second most expensive is the Champs-Elysées area in the 8th arrondissement which remains flat compared to last year, at 16,350€/m².
Among the greatest increases is Saint-Thomas-d’Aquin in the 7th district, which at 15,870€/m² has increased by 10% since 2019. Properties that require renovation provide opportunities at lower prices, such as this spacious 3 bedroom on the quays of the Seine.
Most impressive is Saint-Merri in the 4th. At 14,030€/m² this area shows growth of 16% over last year, and an increase of almost 32% over the past five years.
Some areas have so little property that changes hands, there are no statistics for the second quarter of 2020. One of these is St. Germain-des-Prés, where this renovated 2 bed 2 bath is for sale.
These levels of growth follow the increases already seen in the first quarter of 2020, something we previously reported in this blog.
Overall transactions are down
Although the growth is encouraging, the overall volume of real estate transactions is down by 12% compared to last year. This is due to a combination of the traditionally limited inventory of properties available, and transactions postponed or cancelled during the confinement.
But this could change. Much is being said about housing being a ‘safe haven’ during the lockdown. Being confined at home has undoubtedly made many people think about their living spaces, and what they really want from their properties.
Some are upsizing to larger apartments, or even purchasing homes outside of the city. Either way, this leaves behind an empty property to sell, which increases inventory on the market.
Altogether, it is likely too early to truly understand the full effect of Covid-19 and the lockdown on property prices. But the positive trends showing so far this year certainly give hope.
Predictions for the third quarter of 2020
The next question is if the Paris real estate price evolution will continue upward, and for how long.
Looking ahead to this fall, the notaries also give their predictions for the third quarter of 2020. Based on pre-contracts already signed, they anticipate an overall continuation of the growth seen this year. The reports indicate “a further upward trend by October.”
Of course, nothing is certain, especially while we are still very much in the midst of the pandemic. However, the notaries indicate current activity shows a “favorable signal” that the housing market in Paris is set to remain strong.
Other positive indicators are the current low mortgage rates, making it very attractive for many to buy. The world also has eyes on Paris due to upcoming events such as the Olympic Games in 2024.
New ways to buy and sell in 2020
The pandemic has also created new and innovative ways to buy and sell. This has changed the relationship between clients and agents, agents and sellers, and even the notaries.
Of course, with the current travel restrictions, it is easier for international clients to sell rather than to buy, for the moment. That said, here at 56Paris we are helping clients purchase apartments ‘virtually,’ using videos, FaceTime, and other online technologies.
Whether you are looking to buy, sell, or rent, please do contact the experts at 56Paris today, and we will be happy to assist.