Paris housing market is back on track!

18th September 2015

After a continued period of decline, prices in Paris are rising again. Whilst prices in the centre are still below the symbolical 8000€/m2, sales this month in the capital have increased by 20% compared to last year and prices are forecasted to rise over the next 12 to 18 months. 

Overall prices have fallen by 2.6% this year but they have risen by 1.8% in the last few months. Since 2012 prices per m2 have been dropping between 2-3% annually but the increasing activity and number of transactions on the market – led by a strong demand – have recently generated a rise in prices.

Following the laws of supply and demand, if demand continues to increase, supply level will grow scarcer, putting more pressure on prices, causing the prices to grow.

What triggered this stronger demand?

In France housing transactions have increased by 15.2% this year. Interest rates have been falling, hitting their lowest levels in history during the first quarter. Domestic and international buyers therefore have had easier access to credit, which is a big deal when you’re buying in a falling market.

The results of this scenario have been blatant. Loan amounts have soared, loan durations have extended extended with even 30 and 50 year fixed mortgages being available. This year real estate professionals in France have registered a 60% rise of transactions due to foreign investors in the resale market and even more so for new-builds.

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