A new month, another new high for Paris property price records. London, on the other hand, is experiencing the effects of Brexit and all the uncertainty that comes with the constant delays and lack of clarity which has impacted the London residential property market negatively from a price perspective.
The numbers speak for themselves
In the French capital, we are close to reaching the 10,000 €/per square metre mark after continuous price rises over the last 4 years. This is not the same for all the European capitals, especially if we are looking across the English Channel.
The London market prices reached extreme levels pre-2016, especially in Zone 1 and 2 where some flats are on the market at around 16,000 and 17,000 €/per square meters on average, and sometimes more than 25,000 €/m2 for premium addresses. This is still 70% more than in Paris but in the last 2 years, average prices have begun to fall, which is not the case for the French capital, quite the contrary.
The latest publication from LonRes, a leading data source and network centre for property professionals in London, reveals that the situation is similar to a mini crash. In Q1 2019 properties valued under 2 million pounds in London (around 2.3 millions €) suffered the worst decrease for the last 10 years; a stunning -10% in 1 year only.
This is mainly due to the months of political instability and the probability of a No Deal Brexit growing in the mind of investors and corporates. According to Marcus Dixon, lead researcher at LonRes, Property owners have started to become more inclined to accept offers lower than what their property was previously valued for because of the unpredictability of the political events and the risk for even further decrease in value.
French Private Finance views
The market is showing an interesting dynamic. The extremely hot UK market is cooling off and the Paris property market is booming due to the Parisian returners and the wider interest in the Grand Paris project, which is rejuvenating and improving many areas. The French mortgage rates available in Paris are some of the lowest in France. This is due to the high liquidity of the market, which means that banks can be confident the property will sell quickly, which leads to lower mortgage rates to buy property in Paris.