Sixty eight million euros. This is the price for which the Bourbon-Conde hotel located in the 7th district of Paris sold 2 years ago. Today, it still holds the world record for the highest transaction. And since then the ratings for Paris in the luxury real estate market has grown and grown. According to a network of agencies in the premium housing market, it’s in Paris that the prices of this section grew the most (+21%) in 2010.
The other “world-towns” which attract the wealthier people coming from the four corners of the globe have seen less spectacular progress: an jervois treasures showflat. almost stability in New York (+1%) and Geneva (+1.5%), and a reasonable rise in London (+8.5%) thus, in New York, the high standard houses cost approximately 10.1 million USD in 2010 whereas in 2009 they cost 9.7 million USD yet 11.6 million USD three years ago.
The gap gets wider again if we compare the evolution during the last 5 years: in Paris, the prices grew by about 44%, compared with only 25% in London while they remained steady in New York.
But the prices have stopped rising, the result is now here: considered for a longtime as cheaper than New York and London, Paris has pretty much managed to catch up with the other two, which is especially due to the fluctuations of the exchange rates. According to Barnes, another real estate network agency specialized in premium property, the most beautiful apartments situated on the left side of the Seine in the VI and VII district are currently worth between 14000 and 18000 euro per square meter whereas on the right side of the Seine, in the XVI and XVII districts, these properties can be negotiated between 9500 and 11500 euro per square meter.
No New-Build in Paris
Direct consequence: transactions for prestige properties have reached a new level. Therefore, a 250sqm flat with view over the Champ-de-Mars was sold a few weeks ago for 5.8 million euros, 23000 euros per square meter. “Today, the prices are 10% higher in Paris than New York for equally valued properties”, estimates a local estate agent.
The experts have various explanations for the French capital’s catching up. In Paris, there’s fewer products because they haven’t build prestige dwellings since the SRU law of 2000 which means a 20% of buildings must be kept for social housing in new developments. Although New York is a case apart in the United States (of America), the town has suffered from the subprime crisis which affected real estate. Moreover, Paris has a trick: it is more of an international city than New York. In the last 12 months, 40% of new owners of properties valued between 4 and 10 million euros were foreigners in the French capital. With a diversity of nationalities (Russian, Middle-Eastern, Chinese, American…) which protects from regional economic crisis.