The urban exodus, at least in Paris, is already a thing of the past. With more than 40,000 sales in 12 months at the end of June 2022 (latest official notarial statistics presented on Tuesday), real estate transactions in the capital reach a level not seen for 20 years. For the disenchantment of Parisian life, it will be necessary to go back. And the prices? It is true that they still show a very slight drop (-0.8% annual at the end of June) but it is slowing down (it was 1.2% annual at the end of March). And in the second quarter, we even saw a slight increase (+0.7% and +0.1% seasonally adjusted). And according to the advance indicator of pre-contracts, the current average price of €10,590/m² at the end of June could rise to €10,670/m² in October. An additional increase of 0.6%.
An “insolent way”
Although the reversal of the market trend -with an expected drop in prices and volumes- is on everyone’s lips, Parisian notaries believe that a return to the rise in the capital is not ruled out. However, they are not kidding themselves about the current situation. “We have a lot of very dark cloudsDelesalle recognizes me. With inflation completely unrelated to wages, it is true that purchasing power is affected; money is more expensive and above all more and more difficult to obtain…» But despite these elements and also the fact that the shocks in the world economy will probably accentuate the difficulties in the coming months, notary Marc Friedrich could only salute the “insolent way” of the Parisian market.
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Without considering that this return to the increase would be desirable given the current difficulties, the notaries recalled that districts 6 and 7 have already exceeded the threshold of €14,000/m² with respective increases of 7.8% and 5.4%. It turns out that these two districts with 8 (4.2% more up to €12,030/m²) are also the most popular among foreigners, which is no coincidence. In the 7th, non-resident foreigners accounted for 19.9% of the transactions in the 2nd quarter, almost as much as in the 6th (18.4%) and 8th (16.3%) compared to only 8.9% on average in those through the capital. Between the desire of foreigners to return to Paris and the advantage provided by a weak euro, “dollar and pound boast in paris” according to Me Friedrich, foreigners could continue to maintain this high price level.
It is hard to imagine falling below €10,000/m² when it is known that the percentage of transactions carried out below this price is a minority in 5 districts (12, 13, 18, 19 and 20) and exceeds 90% in 5 others ( Center of Paris including 1st, 2nd, 3rd and 4th and 5th, 6th, 7th and 8th). As for exceptional operations, they exceeded €36,000/m² in at least two of them during the 2nd quarter, for very large surfaces (310 m² in both cases) in districts 5 and 16. “The relative stability of prices has made investors return to all kinds of Parisian surfaces, Delesalle believes me, making the most of the stone-refuge concept. And many of them think that it is still time to get into debt before the rises that are coming. And so, these record volumes could lead to new price increases, recovering the capital’s status as a real estate market locomotive, which it ceded to the province for months.
An analysis that many other specialists do not seem to share. Éric Allouche, president of the ERA Immobilier network of agencies, believes that the slowdown in the market must continue and intensify. “We are going to see stagnant prices between now and the end of the year, in volumes that, however, are still quite important since the real estate sector continues to be a safe haven”, he believes. As for the estimates site Meilleurs Agents, he forecasts a 3% drop in prices in Paris for the next year on year, estimating that the capital will experience a “strong oversupply“and markets”very vulnerableto current credit restrictions.
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