Old buildings up 3.2% in three months. Published on page 37 in The Connexion, November 2003.
Paris property up again
14.9% rise in new apartment sales
The Paris property market remains “active” with prices still rising despite a depressing overall economic situation, the city’s Chamber of Notaries reports.
“Slowing down of activity, a continuation of price increases and amplifying of demand,” are the three phenomena which affected property in the capital and its suburbs during the second term, April to June, of 2003, the chamber reveals.
The three months saw the price of old building apartments in Paris rise by 3.2% compared to the first term which saw a 2.7% rise. Buildings in the Petite Couronne outskirts rose by 3% (against 2.2% in the first term) and by 2.5% in the Grande Couronne outskirts departments.
The increase means that the average square meter price of Paris property was €3.747 at the end of June, an increase of 13.9% in a year. The average square meter in the Petite Couronne is now €2.208 (up 12.5%) and up to €1.714 in the Grande Couronne outskirts (up 10.4%).
At the same time sales have dropped for all types of property. Transactions have fallen by 6.4% on this time last year to give a total of 33,850 sales in the three months.
In a year, measuring the end of June 2003 compared to the end of June 2002, the old buildings apartment market was the most affected with a drop of 10.4% to 19,555 sales in the four departments (-13.4% in Paris where half of the sales took place, -7.6% in the Hauts-de-Seine department, -5% in Seine-Saint-Denis and -10% in the Val-de-Marne). This movement has not affected the departments of the Grande Couronne outskirts which report an increase of 1.8% in sales. On the contrary, sales of new apartments are strong with a 14.9% rise in Paris and in the Petite Couronne outskirts and 16.6% in the Grande Couronne. This comes in the face of surrounding economical stagnation and rising unemployment.
This “high level of activity” is attributed to the rental market’s scarcity and steep increases in rent that accompany it making families contemplate the plunge of home ownership and a move towards the Petite Couronne outskirts and its less-prized communes and the Grande Couronne. Low interest rates and the lengthening of mortgage terms no longer seem enough to redeem price rises and families are having to choose whether to delay purchasing or edge outwards.
The notaries conclude that the property market’s easing “brings new adapted measures to restore the private rental offer” in old building housing stock and, with regard to new programs, there is an “urgent need” to free up land for construction.