Housing Market in the Paris Region
3rd February 2023
Paris goes against the regional tide of the housing market in the Ile-de-France.
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After a post-Covid resurgence in sales the housing market in the region has slowed, although sales in the capital continue to rise.
According to the notaires, sales fell by -10% in the third quarter of 2022, the latest date for which reliable figures are available.
Nevertheless, they remain at an historically high level, with over 50,000 sales in the quarter, up +14% on the 10-year average.
House sales have been worst affected by the slowdown, falling by -20% in the inner ring (petite couronne) compared to 2021. That is down by -4% on the average of the past 10 years. By contrast, in the outer ring (grand couronne), although sales are down by -14% over the year, they remain higher than the 10-year average. "The attractiveness of this market, reinforced by the Covid crisis, now seems to be behind us," say the notaires.
In contrast, sales rose in Paris, reaching an historical record of over 40,000 apartment sales in Q3, +9% more than the previous quarter, prompting notaires to talk of a "return to grace of the capital".
The graphic below shows the movement in prices and sales across the region over the past 20 years. The bars show total sales and the diagonal line average prices.
The notaires attribute the increase in sales to falling prices, down -1.2% in the year to an average of €10,660m², a decrease of nearly -2% in 2 years.
There are, of course, significant variations in prices across the capital, ranging from around €14,000m² in the 6th and 7th arrondissements to €8,810m² in the 19th.
Sales to non-residents accounted for 2.2% of all sales, for a property with an average surface area of 51m², costing €12,450m², a budget of €635,100. Buyers privileged the 6th and 7th arrondissements, the two most expensive districts in the capital. In these districts foreign buyers accounted for around 12% sales.
Most of the foreign buyers were US nationals (23%) followed by those from Libya (12%), Italy (9%) and Germany (8%). US nationals spent an average of €825,000, the largest budget of the group of international buyers.
The graphic below shows average prices by arrondissement.
Elsewhere in the region, the average price per m² of an apartment in the inner ring is €5,570m² (+0.9% over one year), whilst the average cost of a house in the outer ring is €342,800m² (+5.7% over one year).
More recent provisional figures from the notaires show the fall in sales continuing (down -8% on a year), although remaining at an historically high level. Once again, however, Paris stands out, with a progression of +5% in sales.
Prices to Nov 2022 were up by +1.7% in the Ile-de-France, although prices in Paris fell by -0.8%, which the notaires expect to be the outcome for the year.
In terms of the outlook for 2023 the notaires are by no means gloomy. "Real estate retains its role as a safe haven and asset security in an inflationary context, and the needs related to demography and societal changes are still there," they conclude.
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