Gulf between London and Paris Property Prices Narrows
Recent moves in London and Paris property prices have brought the two cities closer to parity. What are the factors behind this trend?
London’s colossal price growth in the last ten years (80%) has shown signs of slowing in the last few months. A recent report showed that, despite the strong performance of some suburbs in October, average prices fell as London has seen the slowest property price growth since 2012. Meanwhile, Paris continues to show strong price performance this year.
Both cities have huge disparity with the rest of their country. London’s price average is currently around €10,500/m2, while UK-wide the average price is at €3,000/m2. Paris’ average figure is €8,400, while even other major cities like Bordeaux and Strasbourg barely eclipse €3,000/m2. Most French cities are currently seeing falling prices, but not Paris. Like London, the French capital remains the exception.
Paris on the rise and London going soft? Brexit of course comes to mind. On top of that, the UK parliament imposed increased stamp duty (tax on real estate transactions) for buy-to-let investments. This has deterred some investors from buying additional residential investment property in the city.
Brexit may have also helped Paris become a more attractive property investment. Forecasters are predicting a fall in prices in the UK capital of between 5% and 10% in 2017, while growth in Paris property prices shows no discernible sign of slowing. Big infrastructure projects like the Greater Paris plan, coupled with the Brexit effect, has resulted in strong forecasts for the city’s performance next year. Benoit Galy, of greenacres.com – a listings site for Brits looking to buy property in France – believes that UK investment will move to Paris should the UK proceed with its planned departure from the single market.
This remains to be seen, as talk from big name firms about the possibility of moving their London operations tends to mention Frankfurt and Dublin, not Paris. France’s strict labour laws remain an important hindrance. But current real estate price trends may well be caused by Paris pinching some of the UK’s investment attraction, bringing the two closer in price in the coming years.
image © Arch_sam – Flickr