The property market in Paris

Political and economic uncertainty continue to affect the market.

8 April 2014, Words by Yolande Barnes

 

France just avoided another recession in 2013, its economy growing by 0.3%. Tax increases and weak household spending, coupled with volatility in the Eurozone, have impacted negatively on Paris’s real estate markets.

Apprehension dogs property markets as discussions about taxing high incomes continue. This has particular impact at the top end of the residential market, but also has knock-on effects on relocation decisions in the private corporate sector. While residential values are down 2.1% across the SEU overall in 2013, they fell 5.7% in its super-prime residential market over the same period.

In spite of this, Paris continues to see a flow of buyers from the Middle East seeking a safe haven in light of continued unrest in their home region. Paris boasts the kind of large, lateral apartments favoured by such buyers, at cheaper prices than London. If it weren’t for perceived tax threats, euro jitters and a less transparent market, Paris would be competing much more strongly with London for inward investment in prime real estate.

Property for first-time buyers in Paris is expensive and in low supply. Residential sales volumes are still low but are anticipated to recover somewhat when vendors accept lower prices.

In the office sector, rents are rising in central locations as companies start to return, having experimented with cheaper but less productive peripheral and out of town locations. Office costs among our SEU increased by 8.5% in the last six months of 2013 alone.

 
 

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