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Last Updated: Oct 07, 2016

Prices in Paris have risen for three consecutive quarters, and in France generally house prices are slightly up.

Apartment prices in Paris rose by an average of 2.66% (2.67% inflation-adjusted) to €8,100 (US$ 9,126) per square metre (sq. m.) during the year to Q2 2016, according to the La Chambre des Notaires de Paris.
  • In Île-de-France, the country's wealthiest and most populated region, the average apartment price rose by 1.53% y-o-y (1.54% inflation-adjusted) to €5,310 (US$ 5,983) per sq. m. to Q2 2016.
  • In the Petite Couronne (Small Crown), the average price of apartments rose by 0.95% y-o-y (0.95% inflation-adjusted) to €4,270 (US$ 4,811) per sq. m.
  • In the Grande Couronne (Great Crown), the average price of apartments fell by 0.35% y-o-y (0.34% inflation-adjusted) to €2,880 (US$ 3,245) per sq. m.

In Metropolitan France generally, house prices rose by 0.78% during the year to Q2 2016, the second consecutive quarter of year-on-year price hikes, according to the National Institute for Statistical and Economic Studies (INSEE). When adjusted for inflation, house prices rose by 0.79% over the same period. House prices in Metropolitan France remained unchanged (-0.93% inflation-adjusted) from the previous quarter.

The price rises were partly attributable to low mortgage interest rates. "The dynamics of the real estate market in this early part of the year was largely conditioned by lower interest rates," said MeilleursAgents' CEO Sébastien de Lafond.

The price rises were backed by rising demand. From January to July 2016, 15.2% more existing homes were sold in France than during the same period last year, according to the Conseil général de I'environnement et du développement durable (CGEDD).  In Paris, the total number of existing apartments sold rose 13% y-o-y in Q2 2016 , according to  La Chambre des Notaires de Paris. In Île-de-France, sales of existing apartments increased by 14%, and in Petit Couronne and Grande Couronne by 14% and 15% respectively. Existing homes sales rose 19% in Petit Couronne , 10% in Grande Couronne, and 13% in Île-de-France.

Residential construction is up. House permits issued rose by 2.5% to 390,625 units in 2015 from the previous year, according to the Ministère de l’Écologie, du Développement Durable et de l'Énergie.
  • New housing starts rose by 3.13% to 173,448 units during the year to July 2016.
  • Total authorized dwellings increased by 12.56% to 242,730 units, during the same period.

France house pricesThere are no restrictions on foreign ownership in France. Most property is likely to be freehold. Apartments are likely to be held in two forms of freehold: co-ownership (which has meetings of co-owners, with votes taken and accounts kept), and volumes, adapted mostly for mixed-use developments. There are also leaseholds, for up to 99 years.

Analysis of France Residential Property Market »

Last Updated: Aug 14, 2017

The good news is that if you have an apartment in Paris you will have no trouble letting it. Demand outstrips supply, the main reason that rents are not higher being that French rental contracts are often long-term and there are legal restrictions on raising rents during the contract.

However gross rental yields from apartments in Paris are poor, at around 4.2% for small apartments and 3.9% for big apartments (however it is fair to say that our Paris yields results arguably may not reflect yields in less desirable locations, which are likely to be higher, because our sample focuses on Paris´ high-end city centre).

The price of a 120 sq. m. apartment in these locations is around EUR 970 per sq. m., or EUR 90.1 per sq. ft. This year, we did not find a big price-difference between smaller and larger apartments.

The average monthly rent ranges from EUR 32 to EUR 35 per sq. m., or EUR 3.8 to EUR 3.25 per sq. ft. Smaller apartments tend to rent for proportionately more.

Round trip transaction costs are high on residential property in France.  See our French residential property transaction costs analysis and our Transaction costs in France compared to other countries.

Read Rental Yields  »

Last Updated: Jan 19, 2015

Rental Income: The effective rate of tax on gross rental income accruing to nonresident foreigners is likely to be around 10.00% on an income of €1,500/month, according to calculations provided by Anthony & Cie.

Capital Gains: Capital gains are generally taxed at 19%. Capital gains tax is levied at 33.33% for non-EU citizens.

Inheritance: French private international law uses the standard double rule on inheritance: the law of the deceased’s domicile applies to moveable assets, and the law of the location of the property applies to immoveable assets.

Residents: French residents are taxed on their global income at progressive rates, from 5.5% to 45%.

Read Taxes and Costs  »

Last Updated: Jan 19, 2015

Round-trip transaction costs in France can range from 7.90% to 28.99%%. New properties have the highest costs because of the 20% VAT but this is slightly offset by a lower registration fee. Real estate agent fees range from 3% to 10% typically split between buyer and seller.

Read Buying Guide  »

Last Updated: May 25, 2006

French tenancy law is very pro-tenant.

Rent: Though the initial rent can be freely agreed, the rent can only be revised once a year, and not more than the increase in the (new) INSEE rental index. In combination with a highly restrictive contract structure, this means that rentals of old apartments have tended to drag well behind new rentals and prices.

Tenant Security: An unfurnished property contract has, as a minimum, a three-year term, though furnished property contracts may be for one year. In both cases, even when the contract ends, the owner can only recover the property if he or a family member intends to live there, or he intends to sell. In addition, eviction through the legal system takes a long time.

Read Landlord and Tenant  »

Last Updated: Oct 07, 2016

French economy is quite weak; presidential elections in 2017

France gdp inflationGDP rose by 1.3% during the year to Q2 2016.  However the French economy slightly contracted marginally during the second quarter (by 0.1% q-o-q, after 0.7% q-o-q growth in Q1 2016, according to the National Institute for Statistical and Economic Studies (INSEE).

The economic contraction in Q2 2016 was due to a sharp decline in domestic demand. Private consumption expenditure fell by 0.1% in Q2 2016, and gross fixed capital formation also dropped by 0.2%.

From 2004 to 2007, the French economy expanded by an average of 2.3% per year. In 2009, real GDP fell almost 3%, the country’s sharpest recession since World War II.

Despite the worsening eurozone debt crisis, the French economy managed to expand by almost 2% in 2010 and by another 2.1% in 2011. In 2012, the economy stagnated, with growth of 0.2% as President Francois Hollande squeezed the budget deficit and firms slashed thousands of jobs. France’s weak economic expansion continued in 2013 and in 2014, with growth rates of around 0.7% and 0.2%, respectively. In 2015 France's GDP expanded by 1.3%, according to INSEE.

France's economy is expected to expand by 1.4% in 2016 due to low interest rates, tax cuts and low energy prices, according to the OECD. "The risks to the outlook are now firmly on the downside, with much higher uncertainty around financial conditions and political developments in Europe," says the IMF.

Aside from Brexit, internal issues affecting the country's growth include:
  • The recent terror attacks in Nice (in July 2016), Paris (in November 2015), and the shooting at the satirical magazine Charlie Hebdo (January 2015) may be hurting the county's tourism sector as the number of hotel arrivals fell by 7.5% in the first half of 2016. Tourist arrivals also fell by 8% in Q1 2016, according to Euromonitor International.
  • The hosting the Euro 2016 tournament actually brought economic losses and a decline in productivity.
  • Strikes, which recently led to an amendment of some provisions in the Khomri Law (named after Labour Minister Mariam El Khomri) that was intended to introduce labour reforms.

High unemployment is one of France’s major problems. In Q2 2016, unemployment in France was still high at around 9.9%, although it fell from 10.2% in the first quarter.

Inflation was 0.2% in August 2016, higher than the 0.05% inflation recorded the same month last year.

The European Commission expects France’s public debt to rise to 96.4% of GDP in 2016, up dramatically from 85.8% of GDP in 2011, and far higher than previous estimates. The government was able to cut the deficit to 3.6% of GDP in 2015, down from 4% in 2014.

In May 2012 Francois Hollande became the country’s first Socialist president since Francois Mitterand (1981-1995), In August 2014, France entered political turmoil triggered by Economy Minister Arnaud Montebourg´s demand for an end to austerity policies. Montebourg demanded a fiscal stimulus to boost growth, arguing that France shouldn’t be “slavish” and “dogmatic” in pursuing deficit cuts.

In response President Hollande asked Manuel Valls, Prime Minister since March 2014, to form a new government “consistent with the direction set for the country”. Montebourg was replaced as Economy Minister by Emmanuel Macron, a former investment banker at Rothschild. Michel Sapin, a career politician, was appointed Finance Minister, all of which signals a determination to continue France´s present austerity policies.

The country is gearing up for presidential elections in April to May 2017. Some notable potential contenders include former president Nicolas Sarkozy, current prime minister Manuel Valls, economy minister Emmanuel Macron, former prime minister Alain Juppé, and National Front party president Marine Le Pen.

  • Low effective rental income tax
  • High yields in Paris
  • Global political powerhouse
  • Moderate to high transaction costs
  • Pro-tenant rental market
Price (sq.m): €12,796 For a 120 sq. m. property, usually an apartment.
Rental Yield: 2.79% For a 120 sq. m. property, usually an apartment.
Rent/month: €3,564 For a 120 sq. m. property.
Income Tax: 10.00% Assumptions: Owners are a non-resident couple drawing US$ / €1,500 per month in rent, with no other local income.
Roundtrip Cost: 18.45% The total cost of buying and then reselling an apartment. Includes:

* all transaction taxes and charges:
* lawyers' and notaries' fees
* agents' fees

Assumptions: The buyers are non-resident foreigners. The apartment cost US$250,00 / €250,000.
Cap Gains Tax: 33.30% Assumptions: The property was bought for US$250,000 / €250,000, and sold 10 years later, after a 100% appreciation.
Landlord and Tenant Law: Strongly Pro-Tenant Rating is based on a detailed study of each country’s law and practice.

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