Apartment prices in Paris have risen to an average of €6,680m², say the French notaires, a record for the capital.

The previous highest level for prices was in the third quarter of 2008, when they reached €6,640m².

The increase has occurred right across the capital, with prices at an historically high level in 13 out of 20 districts (arrondissements).

The most expensive area in Paris is Saint-Germain des-Pres in the 6ème at €12,440m², while the cheapest is Pont de Flandre in the 19ème at €4,840m².

The increase means that prices of apartments in the city have risen by an average of 9.8% in the past year, and by 3.1% over the past three months.

The figures from the Chambre des Notaires de Paris relate to sales completed during the second quarter of the year, April to June.

The number of sales in the city for in the quarter rose slightly by 1.6% over the first quarter, although sales remain 19% below the average for the second quarter for the period 1999-2007.

Suburbs

Driven out of Paris by the high prices, the middle classes seem to have found refuge in the suburbs. Within the inner ring (Petite Couronne) house prices rose by 5.2%, to reach €339,000 (11% in a year), while in the outer ring (Grande Couronne) house prices rose 1.6% to reach €266,600 (4.3% annually).

In the wider Ile de France, house prices rose by around 2.5% in the quarter and 6.3% in the year. The average price of a house in the Ile de France is now €287,400.

Saint Germain-en-Laye became the most expensive suburb in the Ile de France, at €5,100m² (7.3% in one year), ‘yet the demand continues to increase’, says Philip Sansot, notary at Montmorency. ‘Prices here are now higher than that of Versailles.’

Further away from Paris, "the new homes market is very slow, with only 580 sales in the second quarter, says Philip Sansot. 'Demand exists but the cost of programs is too high due to land prices', he says.

Safe Haven

Prices have in part also risen due to the poor performance of the stock market, with ‘la pierre’ being seen more than ever as a safe haven for investment.

"Since September 2000, the CAC 40 fell from 7,000 points to 3,600 points, while the INSEE Notaries Real Estate index from 100 to 203’, says Frederic Dumont a notary in Montreuil.

‘That means a capital sum of €100,000 invested in 2000 is now worth €50,000 if it had been invested in the stock market, whereas it would be worth €203,000 if it had been invested in property".

However, the notaires caution about prices continuing to rise steeply. ‘In the last 15 years property prices have increased by a multiple of 2.5, compared with 1.6 for household income.' As a result, 'the current highs may be close to their maximum', say the notaires.