Paris Apartments : Prices for 'ancien' apartments are slowing down

The last seven years has seen record appreciation in the Paris real estate market but the media's coverage and speculators have been giving mixed signals to buyers and sellers over the last 6 months.

Talk of bursting bubbles, crisis and crashes have been dominating the real estate market in the Paris region for several months now. The truth is that prices are still climbing but at a somewhat reduced rate. For the first time in years market increases in some or Paris’ ‘quartiers’ have fallen below 10% while the immediate suburbs are still enjoying 14% growth and higher.

This may be due to a general market slowdown globally but has certainly been fueled by media coverage and speculation. Uncertainty about the outcome of impending presidential elections has also created a significant drop in the number of transactions taking place (3.9% drop in transactions from 2005 to 2006)

Latest figures from the Notaries say the average price per square meter for ‘ancien’ apartments remains at 5 772 euros with the highest of 8.586 euros m² being the 6th arrondissement.

While this comes as welcome news to would-be buyers it is certainly a little early to expect prices to stabalise. The current stagnation certainly gives current buyers a little more bargaining power but this may be short lived.

Speculation on a pick up after the elections and the continuing lack of offers that has helped inflate prices goes against the media’s coverage and is creating a great deal of uncertainty among buyers and sellers certainly as to the best timing for transactions.

The Notaries are however confident that the current slowdown by no means suggests that the bubble has burst.

Article in Les Echos (French)