Paris Real Estate Market
Key Figures
€10,680/m2
Average price in February 2021
In February 2021 the average price per m2 was €10,680/m2 across the 20 Parisian arrondissements.
The 6th arrondissement registered the highest average price at €14,570/m2.
The 19th arrondissement recorded the lowest average price at €9,080/m2.
Residential real estate in Paris demonstrated in 2020 its resilience as the average price increased by 2.9% over 12 months (February 2020 – February 2021).
Interestingly the global real estate service provider Savills ranked Paris as the 2nd most resilient European city to COVID-19 as early as July 2020.
+2.9%
12-month change in average price
-1.7%
3-month change in average price
A closer review of the transactions reveals two distinct phases over this period.
First a steady rise until November as average price culminated at €10,850/m2.
Then a slight 1.7% drop occurred between November 2020 and February 2021.
Transaction volumes declined unsurprisingly by 11% over last 12 months due to lockdowns and to a lesser extent the absence of foreign buyers.
Looking forward, based on letters of intent signed in Q2-21, volumes are expected to bounce back strongly in the coming months.
-11%
12-month change in transaction volume
Structural dynamics of the Paris market explained below can help to explain this overall positive performance in an unprecedentedly challenging environment.
Market Dynamics
The scale, maturity, diversity and international cachet of Paris underpin its attractiveness as a major destination for international buyers. From a regulatory perspective, foreign and domestic buyers invest into Paris on an equal footing.
Still the Parisian market has been historically led by domestic investors as a result of a strong home bias among French buyers and a reducing but still present language barrier for foreign investors.
Proportion of foreign buyers
Foreign buyers
French buyers
8%
92%
Proportion of foreign tenants
Foreign tenants
French tenants
15%
85%
It follows that prices in the French capital have been to a large extent insulated from global trends, less volatile and essentially driven by the domestic economic conditions and outlook of France.
A look back below on how the prices in Paris reacted during the Global Financial Crisis illustrates the defensive nature of this market.
Average price in Paris in €/m2
… which was reversed within c.6-9 months and followed by a steady rise pushing prices to a level 25% higher than before the Global Financial Crisis in 18 months
During the Global Financial Crisis in 2008, average property price dropped by 7.1% over 12 months between Q2-08 and Q2-09…
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