Paris property prices drop
Notaires say cost of buying in the capital has fallen - while researchers say property bubble is set to burst
PROPERTY prices have started to drop in Paris after defying the average 0.4% fall seen elsewhere in Ile-de-France.
The Chambre des Notaires de Paris-Ile-de-France said that between December 2011 and February this year the average price per square metre in the capital was now €8,300 - a drop of €80 on the November figure.
Notaires forecast that the downward trend would amplify and by the end of 2012 the average price would be around €8,100sq.m.
In Ile-de-France prices for September-November were down 0.4% with flats down 0.3% and houses down 0.6%.
Although flats averaged €5,380sq.m, this hides large differences in different areas: from the €8,300 in Paris to €2,780 in Seine-et-Marne, €3,300 in Seine-Saint-Denis and €5,380 in Hauts-de-Seine.
The effects of the changes in capital gains tax [where allowances have been reduced across the board] sparked a 6% increase in sales between December and January. Sales in January, however, soared 87% on January 2011 as the changes came into effect in February. February sales were 27% down on February 2011.
Meanwhile, property research group PrimeView has said the property market in France is a "bubble" set to burst. Its latest study says all the incentives that pushed prices up had been withdrawn and the market was set to tumble.
It said that the end of unconditional state support for the sector could put property "into a vicious circle of price-cutting, in the same way that the price rises built upon themselves between 1998 and 2011.
