Paris Housing Market Slows Down
Tuesday 01 May 2007
The prices of apartments in Paris rose by an average of 9.9% last year, according to the annual review of the market carried out by the Paris Notaires.
This compares with an increase of 14% in 2005, which leaves the average price of city centre apartments at €5772m² for the year ending 2006.
Overseas buyers accounted for 7.8% of all sales, a figure which has grown by 20% over the past 10 years.
The most popular area in Paris for overseas buyers was the Notre Dame area in the «4ème arrondissement», where 38% of all purchases were made by them. The area was also the most expensive part of the city in which to buy, with an average purchase price of €9,996m².
Next most popular for overseas buyers was the Champ-Elysées area where 28% of buyers were from abroad, followed by Les Invalides, Saint Gervais, and St Germain-des-Prés, each around 21%.
Other property price hot spots were the chic «6ème arrondissement», (including St Germain-des-Prés) with an average price of €8,586m². Biting at its heels are the «7ème» at €8,307m², and the «4ème» at €7,951m².
Although in recent months the market has been calmer, the Notaires do not consider that prices will drop significantly this year, if at all, with demand continuing to outstrip supply.
Despite increases that have occurred in interest rates, many existing borrowers are on fixed rates, and new borrowers are being offered increased repayment periods.
Since 2001 a substantial facelift of large areas of the city has been taking place, and more are planned over the next few years, with up to 10% of the city undergoing Redevelopment.
A new tramway system has also been inaugurated, with an extension of the system planned over the next few years, to encircle large areas of the city.
It is likely that the new tramway system, the creation of major parks, and the redevelopment of former industrial sites will give further impetus to price jumps in a number of previously modest areas of the city.