Paris real estate prices may be showing a slight drop, but there is more news coming out of the latest notary reports.
They reveal that 2021 ended with property sales exceeding their pre-crisis levels for the first time.
As the market returns to strength, we examine the results in more depth.
The fourth quarter of 2021
Four times a year, the Chambre des Notaires de Paris publish their official reports, revealing the up-to-date property prices in our capital.
We are taking a look at the latest results, covering the final quarter of last year from October to December 2021.
At first, you might think the main result is big news – Paris real estate prices have gone down, however slightly.
But it’s not that simple.
Average prices may have dropped by just 1.6% compared to the same quarter in 2020, according to the official reports. But this decrease is nominal and considered ‘flat’ by most.
Something else revealed in the notary results is also significant – that sales are on the rise again. With 36,400 Paris property transactions on the books, it’s an increase of 16% on the previous year. That’s growth of 11% over the past 10 years.
So yes, it’s not the price growth seen regularly before the Covid-19 pandemic. But given the challenges of the past two years, the reports are encouraging and welcome news for Paris property owners and investors.
The results in more depth
Looking at the bigger picture, Paris property prices remain strong with overall growth of 27.2% over the past five years.
Looking at the three-monthly quarters last year, the reports show a minimal reduction of -0.4% in the second quarter, then up again by +0.7% in the third quarter, which we reported in this blog at the time.
Finally, the prices dipped slightly once again by -1.7% in the fourth quarter.
The notaries refer to these results as “a very slight downward trend in Paris.”
Around the arrondissements
Of course, these figures are averages. Different areas of the capital yield different results. The highest prices are seen in the 6th arrondissement (district) of Paris which is averaging 13,980€/m². That’s growth of +1.3%.
A property from our portfolio in the 6th is this one-bedroom apartment, set on a quiet sunny street in Saint-Germain-des-Prés. Its high ceilings and French windows make it a beautifully light and bright apartment.
Meanwhile, prices continue to go up in the center, led by the 7th which is the second priciest at 13,300€/m², growth of +2.2%.
However, the most expensive overall is the Invalides area located in the 7th. This reaches an average of 15,470€/m².
In the 11th, while prices are down -1% overall, some areas of the district still show growth. For example, the St Marguerite quarter, home to this two-bedroom duplex apartment near the place de la Bastille in a trendy area. Here, prices are up +0.4% for the previous quarter and 1.1% overall for the year.
All in all, real estate prices in Paris are relatively steady, especially considering 2021 was still affected by the Covid-19 pandemic.
Reasons behind the results
What are the reasons for this slight change in the real estate market? The reports do point to a number of suggestions.
Following the pandemic, time spent at home, and the opportunity to save money while in lockdown, have both contributed.
Overall, households have more desire than ever to become owners. It is the age-old feeling of security of “investing in stone.” Spending time at home during confinement has also made more people realize the importance of a place they can enjoy. A Parisian location also brings another layer of security – the popularity of living in the French capital endures.
For many, real estate continues to be a better investment than the stock markets, while interest rates also continue to stay extremely low. The notaries suggest some owners are moving their assets from the markets, and repositioning them as real estate in Paris.
The fact that prices have not gone up significantly is also suggested as boosting the overall volume of sales. There is less pressure on the prices, making purchases more attractive at this time.
Predictions for Paris real estate prices in 2022
The new notary reports do also make some predictions for 2022…
For this current quarter of January to March, they predict a decrease of 450€/m² or less. This will lead to an annual decrease of -0.8%. Again, this is minimal.
The outlook remains optimistic, and prices are set to stabilize.
To sum up, the notaries themselves give the final word about the current real estate market in France: “This could be the beginnings of a soft landing and a form of normalization of the market.”
Time will tell, and we will be here to bring you the results when we have them.
Looking to invest in Paris real estate?
With the positive news about Paris real estate prices, you might be thinking about buying a property of your own.
That’s where 56Paris can help.
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