New figures show that the slowly decreasing property prices have created separate pockets of value in the city of lights. The largest decreases were observed in the most expensive districts and only three out of twenty arrondissements resisted price falls with the average price per square meter falling below 8,000 euros.
According to a study by the Notaries of Ile-de-France only four of the twenty districts of the capital now have an average price per square meter more than 10,000 euros, two times less than two years ago.
Over the whole of France, prices fell 2.2% in the last quarter of 2014 and evidently these falls did not spare Paris. Industry professionals anticipate a Parisian property price erosion of 5%, for both the capital and the Ile-de-France region over 2015.
“We can not say whether it is a catastrophic fall. There will be no real price collapse, to the extent that there will always be a lot of requests in Paris,” said Jean-François Buet, President of the Fnaim . “This is a rather healthy phenomenon, it shows that prices readjust and rebalance the market.”
Only the fifth, eighth and ninth arrondissements continue to resist. The most substantial decreases were found in the most expensive districts: the prices in the second, fourth and seventh district have fallen by 6.2%, 7.4% and 6.5% respectively.
This sharp decline is down to the scarcity of buyers for these types of properties. This is giving proactive investors a lot of room to negotiate on prices, particularly if any refurbishment work is required.
Real estate outside of central Paris is also taking the hit. Following in the footsteps of the capital, suburb prices fell by 1.1% on average, with very sharp declines around 6% in Levallois-Perret, Hauts-de-Seine.
There are currently several markets in Paris, largely defined by the size of the properties. Inventories for those with five or more bedrooms continue to swell as nobody is being, which is exactly what is driving down the prices.
Conversely, there seem to be no problems for studios and one to three beroomd apartments, for which the market is very fluid. “These kind of apartments, as long as they’re high quality and coveted, sell very well,” says Jean-François Buet.
So with a lack of domestic buyers for Paris’ larger apartments, international investors are likely to take a stronger hold on the market.