Paris property prices reach all-time high

  

Pline via Wikimedia Commons

Property prices in the French capital have reached their highest-ever level with an increase of 7.8 per cent over the past 12 months. The average cost of a 50-square-metre apartment in Paris is now around 334,000 euros.

A study by the Notary's Association of Paris and the surrounding region says the rise in prices is due to a lack of properties for sale.

Christian Lefebre, President of the Association, says prices should continue to rise through the end of the year as demand continues to outstrip supply, and should reach 10 per cent for the whole of 2010.

Prices vary throughout the capital, with the sixth district claiming the prize for the most expensive arrondissement, closely followed by the seventh and the fourth districts.

At the other end of the scale, the nineteenth district has the cheapest properties, costing on average 267,000 euros for 50 square metres.

The price increase is not restricted to the capital. According to Insee, the National Statistics Insitute, the cost of apartments across France has risen overall by six per cent, with a rise in house prices of 5.8 per cent.

But Lefebre warns that the rise may not continue. In an interview with Le Parisien newspaper, he says interest rates on property loans, which are at an historic low, are bound to rise in the medium term, which will reduce what buyers can pay.

"I don't think we are looking at the same situation we had at the end of the 1980s when there were plenty of properties for sale," he said. "This is the housing market catching up after a drop in prices in 2008 and 2009."