Regular readers of the 56Paris blog will know from our articles over the past year – there’s a slight trend showing Paris property prices decreasing.
But are things so black and white?
We take a look at the notary reports covering the previous three months.
The latest from the Chamber of Notaries
The Chamber of Notaries are the go-to resource for all the latest prices and transactions affecting the Paris real estate market.
The latest figures, which reflect the third quarter of 2023 from July to September, suggest that the market is experiencing a slight downward trend.
It’s something we reported on earlier this year.
However, a closer examination reveals a more nuanced picture, with distinct dynamics playing out across different areas of our city.
The bottom line – Paris property prices are slightly decreasing – but certainly not everywhere.
This means it’s still perfectly possible to make a sound purchase. It depends on various factors, such as where in Paris you buy.
The third quarter of 2023 – the latest results
According to the latest notary reports, average property prices in Paris have decreased by -0.4% in the third quarter of 2023, to 10 090€. This modest decline brings the year-on-year drop to -5.3%.
While the overall trend is downward, it’s worth noting that prices remain higher than they were five years ago, up 6.2%.
As expected with these results, the flattening or slight decline in prices is also accompanied by a decrease in transaction volume. With 34,500 sales over the past year, the overall number of apartments sold in Paris has fallen by 29% compared to 2022.
Compared to the average transaction volume for the third quarter over the past ten years – this quarter’s results are 14% below.
However, it really does depend on the arrondissement (district), and then, the neighborhood within that.
Factors affecting the real estate market
Right now, at the end of 2023, there are many factors affecting the market.
There is the current post-Covid economic climate, in Europe and worldwide. And also the ongoing Ukraine conflict. Both have undoubtedly contributed to the current trends.
Inflation, which reached record highs in recent months, has started to ease thanks to a slowdown in energy prices. This development has brought relief to some potential buyers, as it suggests that mortgage rates may not rise as sharply as previously feared.
The European Central Bank (ECB) raised the benchmark interest rate ten times in a row from July 2022 to September 2023. But it recently froze the rate at 4.5% – a suggestion that the peak interest rate is approaching.
Despite this positive aspect, some economists predict that inflation is likely to remain elevated, making it challenging for buyers to maintain their purchasing power.
This could further dampen demand, potentially leading to additional price declines in the coming months, but likely modest ones.
It’s relevant to note that Paris, and indeed the whole of France, is not alone. In fact, the exact same trend is in other European countries. Recently, the average house price in 20 European countries fell for the first time in nine years.
A two-tier market with the central districts resilient
Despite the slight downward trend overall, a distinct divide has emerged within the Parisian real estate market.
So essentially, there are two different markets in Paris to examine.
In the most desirable and central arrondissements, such as the 1st, 3rd and 6th, prices have either remained flat or even increased. This resilience is due to the presence of cash buyers, who are not as affected by rising interest rates, as well as foreign buyers with greater purchasing power.
For instance, in the 1st district, average prices are now 13,790€/m², up 4.6% in the third quarter, 1% for the year, and 7.9% over the past five years.
Similarly, in the Archives quarter of the 3rd district in the desirable Haut Marais, prices climbed to 16,180€/m². That’s growth of 12.2% in the third quarter, up 10.8% for the year, and up 26.8% over five years.
And finally, the historic Monnaie quarter of the 6th now averages 15,120€/m², up 9.5% for the quarter, 0.2% for the year, and 7.7% over the last five years.
Of course, all prices are both average and net to the seller. The average price of advertised properties is typically 5% higher.
Another example – the Invalides quarter
This trend is further illustrated by the Invalides quarter of the 7th district.
Here, prices experienced a slight decline in the third quarter, down -1.3%. But they’ve increased by 0.4% for the year, and are up an impressive 21.4% over the past five years.
It's not hard to see why – this quarter has a unique blend of historical charm, proximity to major landmarks, and excellent transportation links.
One example of a property for sale with 56Paris is this exceptional one-bedroom apartment. It’s set on the quarter’s rue de Bourgogne in this sought-after neighborhood.
This little gem overlooks both the quiet street and a courtyard garden. It offers a spacious living and dining area with a fireplace, and a seamlessly integrated open kitchen. While the tranquil bedroom features an en-suite bathroom with a shower and separate W/C.
Discover Parisian living in the flat where classic charm meets modern convenience, ideal for those seeking a perfect blend of period architecture and contemporary comfort.
So, are Paris property prices decreasing?
The Paris real estate market remains solid, thanks to its two-tier dynamic.
And while prices may continue to soften in the near term in some areas, the resilience of the central districts suggests that the market's underlying strength remains intact.
Overall, we have shown the nuanced picture currently in place for the Paris property market – for current owners and for buyers thinking about making a purchase soon.
At 56Paris we have an experienced team of local real estate experts, who are here to help you, so please do get in touch.
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