House Prices in Paris on Course for 6% Price Increase by End of the Year
The end of October saw predictions that house prices in Paris would have surged 6% by the end of the calendar year. November’s figures indicate the market will live up to these predictions.
The last in an 18-month streak of falling mortgage rates, November saw growth in property transactions in France with the capital performing particularly strongly. Both existing properties and new-build transactions nationwide have increased quarterly and year-on-year, with prices up in the former but down in the latter.
For the most recent quarter, sales of existing properties in Paris were up 9% compared with the same period last year: 46,000 properties sold. The average price/m2 in the capital has reached €8,270, with predictions of over €8,500/m2 by the end of the year – a 6% increase over the course of 2016. By the year’s end, house prices in Paris’s Petite Couronne, the inner ring of the city’s metropolis, should be up 4%, while the Grand Couronne, the outer ring, will see a 3% jump.
Nationwide, the market for existing properties has seen the strongest performance. Prices rose 1.7-1.8% faster than in the third quarter last year; houses 2% and apartments 1.4%.
From the second to third quarter 2016, prices increased 1.2% nationwide. In that time period, the countryside saw higher price growth than Paris: 1.4% from quarter to quarter, with the capital held to 0.9%. And, for the first time since 2012, existing apartments in the countryside saw price growth as well – albeit a modest 0.3%.
Despite rising prices among existing properties, purchasing power has increased in every major city in France, albeit more slowly in Paris, Bordeaux and Lyon, the cities that have seen the most price growth. This is thanks to the record-low interest rates through November, which have just risen slightly in the last weeks and are slated to rise even more. The low rates have meant increased purchase power, which translates into an effective fall in prices: 7.5% in 2016, and 24% over the last five years.
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