1 - Persistent price rise though 1st semester 2010

According to MeilleursAgents.com (« best agents »), real estate prices rose by 1.5% between 1st March and 1st of April. Certain areas saw their prices take off during 1st trimester 2010 (+5.8% for the 1st district, +4% for the 4th district) while others saw their prices stabilise (-0.5% for the 6thn +0.7% for the 7th).
« The market had increased to reach the level peak of one year ago, gaining +6.5% over the first 12 months, and particularly +9% for small apartments » explains Sébastien de Lafond, director of MeilleursAgents.com.

The Chamber of Paris Notaries, has found an evolution of the price index of +0.1% over the 1st trimester 2010 and an increase in transactions of 38% compared to the previous year.

2 – Shortage of apartments for sale, return of buyers and favourable credit terms

Generally speaking, the consensus among real estate professionals is that the Paris real estate market is in better form and that confidence has returned. The crisis was more limited than anticipated, making Paris an « island of stability ». Nonetheless, all are equally unanimous that the price increase is somewhat artificial, due to a shortage of apartments for sale, at the very time that credit conditions are at their historical lowest and buyers are returning.

3 – Consequences for high-end short-term apartment rentals

The Paris market is atypical compared to other French real estate markets. Paris is an island of stability: Paris barely felt the crisis, prices are high but it seems to be a safe market as confidence is high, especially the areas of central Paris that are concerned by short term rentals. It is therefore a good way to invest securely, especially in a time when the general economic fragility is not completely settled. Interest rates will remain very competitive over 2010, but this should not last, so one should take advantage.

On the other hand, one should be prepared to be patient to find THE perfect apartment corresponding to the short term high end market, as the shortage is still very much present.

Sources :
MeilleursAgents
Chambre des Notaires de Paris
Le nouvel Observateur spécial immobilier (avril 2010)
Le Figaro magazine spécial immobilier (avril 2010)