How is Paris's prime residential market faring?
The city is shining bright, its relative value, host of new infrastructure projects and safe–haven status are boosting its appeal.
2 minutes to read
In 2021, Paris came close to eclipsing its 2017 historical peak of 185,900 sales. Existing home sales in the Greater Paris region hit 182,000 transactions, a 12% increase year-on- year.
This strong demand has pushed prime prices up by 6.3% in 2021 and by a further 3% in the first half of 2022.
US buyers are the top source of overseas leads for Knight Frank this year, but below €3.5 million domestic demand also remains strong.
Paris is coming of age. It is no longer the formal and conservative French capital it once was, it is back on trend. Private members clubs and upscale gyms are popping up across the city, from the new Soho House in Pigalle to La Montgolfière next to the Canal Saint-Martin.
This public investment is being matched privately. Several billionaires have increased their Paris footprint in the last twelve months, Xavier Niel and François-Henri Pinault amongst them.
Super-prime sales, those above $10 million (c.€9.5 million) totalled 15 in the first half of 2022, up 100% compared to the same period a year earlier. Slim pickings and competitive bidding define the top end of the market.
Private equity firms are increasing their exposure to the city’s residential market. Cash rich, most are not yield focused but instead want a prime asset in established areas such as the 6th, 7th and 8th arrondissements as a means to store capital as economic uncertainty mounts.
A key draw for global buyers is Paris’s competitive pricing compared to other capital cities. Typical prime prices sit around €21,000 per sq m compared to €27,100 per sq m in New York and €28,700 per sq m in London.
A stark lack of new-build luxury product helps protect prices. Aside from Rue de Grenelle in the 7th, the only new prime development to come to the market in central Paris is that of Scene de Loges, in the 15th arrondissement which will see the old Renault garage completely remodelled into 82 homes, several with views of the Eiffel Tower.
Expect more investment activity around L'Île-Saint-Denis to the north of the city, as the Paris Olympics and Paralympics draws near in 2024. Preparations overlap with the Grand Paris Project, Europe’s biggest urban transport project, which is being completed in stages, delivering 77 new stations and 200km of new rail lines boosting the connectivity between suburban districts.