Apartment prices in Paris fell by 4.2% in the second quarter of 2009, although there was a small increase in sales over the previous quarter.
The figures come from the Chambre de Notaires of Paris and INSEE (French national statistical office) in their regular quarterly report on the property market in Paris and the Ile de France.
The fall of 4.2% in the second quarter compared to Q1 was one of the largest on record, but as it related to sale contracts signed during the economic whirlwind of the winter of 2008 and early 2009, it is probably not that surprising.
On an annual basis apartment prices in Paris are now 7.1% lower than a year ago, with an average price of €6060m², a level equivalent to that observed in mid 2007.
Inevitably the falls have not been uniform across the capital, with double digit falls being recorded in the 15th, 19th and 20th arrondissements, but falls as low as 2.2% in the 5th arrondissement.
Highest prices are to be found in the 6th arrondissement (€9600m²). The area also observed one of the lowest fall in prices of 5.4%, thanks in large measure to the significant presence of international buyers who represented around 25% of all sales.
The average price for each arrondissement in Paris is shown on the following table:
Apartment Prices in Paris – Second Quarter 2009
Source: Notaires d'Ile-de-France
|Arrondissement||Price m² 1nd Qtr 2009||Price m² 2st Qtr 2009||Annual Variation to June 2009|
Paris Property Sales Activity
Although sales rose over the first quarter in comparison with Q1, they remain at a level not seen since the mid 1990s.
As there was an almost complete collapse in sales in the first quarter of 2009 it was almost inevitable that there would be some recovery in the second quarter.
The notaires report that most activity is at the lower end of the market amongst first time buyers rather than existing owners.
Accordingly, the analysis of the fall in prices is inevitably going to be skewed towards the cheaper end of the market, as there are simply not enough transactions of more expensive properties to clearly understand just what is happening to prices.
The notaires report that on the basis of provisional figures for July, the recovery in sales is continuing.
‘The small signs of a recovery observed in the Spring should translate during the third quarter in the volume of sales, and lead us to think that prices will not collapse’, say the notaires.
They forecast that prices in the capital will fall by around 9% in the year over those in 2008, suggesting that much of the price reduction has already taken place.
Over the past ten years apartment prices in Paris have tripled.
Ile de France
Within the Ile de France region the fall in house prices has been greater.
Prices in the ‘Petite Couronne’ immediately around Paris fell by 2.8% in the quarter (13% annually), while in the wider ‘Grande Couronne’ they fell 2.4% in the quarter (10.8% annually).
House prices in the Petite Couronne now average €307,100, while those in the Grande Couronne €257,300, the same level as they were in 2006.
Once again there have been some spectacular differences between the various communes. Thus, within the Petite Couronne price falls of around 30% in a year have occurred at Nanterre, Villmomble and St Maur des Fosses, while in Champigny sur Marne they have been kept to an average of 8.2%.
Within the Grande Couronne prices remained stable at Villeparisis, while they fell by 18.9% at Cormeilles-en-Parisis and by 17.4% at Corbeil-Essonnes.
Other Regions of France
At the same time as publication of the report on Paris, the notaires and INSEE also published some figures on the property market elsewhere in France, although the research is less comprehensive than for Paris.
In their report the authors state that property prices fell by 2.3% in the second quarter, following a fall of 3.8% in the first quarter.
This means that prices are down by around 10% over a full year, a figure which is broadly in line with the annual fall recorded by the national association of French estate agents, FNAIM.
Related Article: Paris Property Market Slows Markedly