Despite the downward trend in real estate prices in the capital, as in the rest of the country, Paris remains the most expensive city, with a price per square meter of around 10,000 euros. And again, it’s average! In the most popular districts of Paris, 6E and 7E especially in the districts, this price per square meter still reaches 15,000 euros, or even more.
Who then can afford to acquire real estate in Paris at these extraordinary prices? In any case, it’s rarely first-time buyers who don’t have enough funds to hope to be able to borrow at skyrocketing interest rates. In order to buy a property in Paris, you also need to have a high income. That is why top managers and rather second-hand buyers or wealthy foreigners are the ones who have the financial means to become property owners in the capital.
First, the state of real estate prices in Paris
According to the latest data from the official website of French notaries, half of the sales of old houses and apartments in France today are above 2,510 euros per square meter and the other half are below the price. Still according to this data, 25% of these sales are around 3,900 euros per square meter and above.
But in Paris, these prices are rising sharply: the average price per square meter of these types of properties (that is, half of the sales will take place at a lower price and the other half at a lower price at a higher price) is estimated at 10,220 euros per square meter (so compared to 2,510 euros for the whole of France). In the capital, 25% of sales are priced at €11,830 per square meter and above, and on the lower price side, 25% trade at €8,900 per square meter or less.
6E and 7EParis districts are the ones where properties are sold the most: for half at a price of more than 15,190 euros per square meter.
However, according to French notaries, the downward trend of real estate prices in Paris confirms, as everywhere in the territory, the inflationary context, which reduces the purchasing power of households and limits their credit capacity to purchase real estate. and cost of real estate loans has also increased (interest rates multiplied by 4 over 2 years). A situation that slows down the sale of real estate and leads to a reduction in its price.
Set at €10,130 per square meter in Paris in July 2023, this price is expected to fall below €10,000 at the end of 2023, a drop of just over 6% in one year, affecting both apartments, so houses in old buildings, but also the new sector for the time being to a lesser extent. First since 2009.
According to estimates as of 1ahemDecember 2023 by Meilleurs Agents, a site specialized in real estate, the average selling price per square meter of an apartment in Paris is therefore 9,686 euros and the price of a house 10,330 euros.
The drop in real estate prices in Paris is striking, especially in some districts of the capital. According to the latest national barometer from Meilleurs Agents, property prices in the 13thE The Paris district shows a decrease of 3% over the last 3 months to 8,634 euros per square meter.
A roughly equivalent price reduction can also be observed in the 10thE19E and 20E Paris districts, where properties sell for 9,417, 8,228 and 8,505 euros per square meter. Only 1ahemthe district, located in the heart of the capital, escapes this decline in real estate prices.
So who can afford to buy property in Paris?
Despite the downward trend in the market, where prices are still hovering around 10,000 euros per square meter, Paris still remains at the top of the big metropolises where real estate investment remains the most expensive.
So who can become a real estate buyer in the capital, when you know that you have to have the means to invest, for example, almost 300,000 euros to buy a 30m studio?2in Paris compared to €111,000 in Lille, €72,450 in Orléans, €61,200 in Roubaix or even €39,400 in Saint-Etienne for example?
Due to property prices in Paris, which are still high, the first households for whom it is practically impossible to become owners in the capital are first-time buyers, i.e. those who buy a property for the first time, most often young households.
Firstly, mainly because due to inflation, their purchasing power decreases and their income level does not allow them to consider becoming buyers.
As a rule, these households do not have enough financial resources, often made up of the income from the sale of an old property or, more rarely, an inheritance, for the bank to grant them a loan. On the other hand, the cost of loans ultimately increases their debt considerably.
As a result, households that already own a property and want to find another accommodation in Paris that would better suit their family composition, or that is better located in the capital, i.e. second-time buyers, are more successful.
Often couples in their forties with children. But in terms of income level, in order to hope to acquire more property in the capital, these households must have a high standard of living, that is, belong to the socio-professional category of senior managers, whose salaries are among the highest. According to Meilleurtaux.com, today you need to have a gross monthly income equivalent to 15,000 euros to buy a house of 75 m2 in Paris.
Thus, as the Inequality Observatory states, “With an average net salary of €4,331, senior managers earn almost two and a half times more than employees and blue-collar workers.“. And again, this is an average. So this level of salary can be much higher, especially if we are talking about managers in Paris, the capital being the metropolis where the places of decision-making, administrative powers and politicians and the headquarters of large companies are located.
Having a good property, that is, being rich, also makes it easier to buy a property in Paris. At the national level, it is also in the capital, especially in the 7thE the district where households with the highest assets are concentrated (on average 3.3 million euros according to the data of the General Directorate of Public Finances for the year 2020).
In the field of large fortunes, there are of course rich foreigners who can consider investing in Paris in one or even several properties in the capital. “The apartments they buy are slightly larger and, above all, much more expensive than other buyer profiles“, highlights the Paris Chamber of Notaries, which also reports that 23% of these investors in Paris in 2022 were from the United States, especially since they recently benefited from the strong dollar, 12% from Lebanon, 9% from Italy, and 8% from Germany.
Foreigners who bought real estate mainly in the most expensive districts of Paris, 6E and 7E districts.
Any chance to hope to buy a property in Paris despite everything?
The reduction in the purchasing power of the French due to inflation and the simultaneous increase in offers for the sale of properties, which in this gloomy context are selling less and less quickly, although in the capital the stock of available goods has not seen as significant an increase as in the rest of the major metropolises, which means that households looking to buy have more room for negotiation.
A godsend then perhaps for those who want to become owners in Paris when, as Meilleurs Agents states, “now nearly 3 out of 4 homes are affected. A record for the capital where 1 in 2 properties sold on price compared to 1 in 4 today“.
Another solution: buy accommodation in Paris considered an energy sieve, i.e. energy-intensive, the number of which is very significant in the capital. 58% of the private housing stock is actually classified as E, F or G in terms of energy.
Due to tightening regulations on these types of accommodation, in particular the upcoming progressive ban on letting them, many owners want to get rid of them, with the possibility of buyers sometimes benefiting from prices lower than the market.