Paris-London: real estate prices come closer
The particularly high level of the London and Paris real estate markets makes them unique in Europe.
In the most sought after districts in Paris – such as here in Saint-Sulpice, in the 6th arrondissement – and in London – Mayfair above – prices can reach from 12,000 to 15,000 euros per square meter, leaving their regional neighbours far behind.
Paris is not France, nor is London the United Kingdom. Among the seven real estate markets looked at by Crédit Foncier, those of the two cities have another thing in common: they dominate and leave their regional neighbours far behind. After years of rising prices, the average price of London houses and apartments reached 10,500 euros per square meter – and up to 15,000 in the Chelsea and Kensington districts – although prices are barely over 3,000 in the rest of England. The same kind of gap separates Paris from other French cities: 8,400 euros in the capital on average, with peaks of more than 12,000 in the most popular districts, as against 3,860 in Lyon. Strasbourg and Bordeaux are over 3,000, while the Marseille average barely reaches 2,750 euros per square meter.
In other countries, the difference between national and regional capitals is always smaller. Certainly in Portugal, Porto is three times more expensive than Bragança, but with much lower values. Similarly, in Poland, Warsaw prices are more than double those of its neighbours, but a square meter sells for less than 1,700 euros.
No impact from Brexit
The Paris-London match is therefore played in a completely different category. That of world cities, tourist, cultural, financial centres able to attract national and foreign investors. And to keep a good proportion of it even when hit hard. The foundations are solid. Regardless of those predicting doom and gloom, Brexit has not for the time being destabilized the market or made many people flee. “It is more the uncertainty that should be blamed, as well as the 3% tax on “buy to let” properties and second homes introduced last April to discourage investors”, explains Béatrice Caboche, director of the Barnes London agency, which nevertheless notes a sharp slowdown in demand. Buyers are waiting for prices to fall and, even more so, for the decisions of the Prime Minister, Theresa May. “London has gone up 80% over the past decade despite the 2008 crisis,” said Lucian Cook, head of studies at Savills. “The elasticity between London prices and the rest of the country has reached its maximum, Brexit or not, London will fall”. Between 5 and 10%, according to the forecasts for 2017, while the Paris values have been going up for the last year. The market is boosted by the resumption of new builds in general coupled with a supply shortage in the capital. Century 21 forecasts a price increase of 6% by the end of 2016 and the same pace in 2017, “excluding international catastrophe or a huge surprise in the presidential elections“, comments Laurent Vimont, president of the network. In other words, uncertainty is high on this side of the Channel as well.
S., Les Echos
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