Property Prices in Paris Soar to All-Time High
With a population of over 2 million packed into 41 square miles, Paris is one of the most populous cities in the European Union. According to new data from the LPI-Se Loger property barometer, the city's real estate prices have risen to unprecedented levels within the past year. Currently, Parisian properties are selling for €9,165 per square meter, an 8% increase from 2016. Apartment prices in particular have risen steeply. Since 2009, apartment value has risen by 45%. The more upscale arrondissements in Paris come with an even higher price tag. Average prices have topped €11,000 per square meter in these in-demand locations. In the prestigious 4th arrondissement of Paris, the owners of a small apartment recently made waves when they put their 3-square meter property on the market for €16,600 per square meter.
This record increase in Parisian real estate has had the effect of pushing out regular workers and middle class families. Currently, just under 7% of new homes and apartments are purchased by working-class buyers. In contrast, 46% of all new property buyers in Paris are made up of business executives and high-earning professionals like lawyers, engineers, architects and doctors. In an attempt to quell the housing shortage, vacation rental site Airbnb had announced that they will be limiting the number of days that hosts can rent out their Parisian properties to 120 days per year. This change will put the online company in line with already existing French laws.
In 2015, property prices in Paris were actually sinking. However, they have rebounded since then due to various international factors. As the most visited city in the world, Paris has become a premium real estate market due to the upcoming 2024 Summer Olympics, which will be held in the city. Rising real estate prices are also credited to increased real estate activity by Italian and British buyers. Since Brexit passed in June 2016, the number of British buyers has increased. In 2017 alone, British consumers purchased 10% of all Parisian property acquired by foreigners. The election in May 2017 of President Emmanuel Macron has also helped to boost prices. Macron is seen by many as pro-business, and his election caused a corresponding jump in value of the euro. After Macron's election, mortgage and credit rates have remained steady, creating a favorable environment for French and Parisian real estate.
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