City of Light's stable market attracts foreign investors

More foreign buyers are making real estate investments in Paris and, despite the worldwide downtown, this is expected to remain an attractive investment location.

The Paris residential property market has not collapsed like many other markets around the world and the long-term prospects remain sound.

Residential property values in Paris, as in the rest of France, have grown in recent years. According to Peter Vines, senior consultant France at CB Richard Ellis International Residential Agency in Paris, residential property prices in France rose by more than 140 per cent between 1997 and 2007. Statistics show that the price of apartments in Paris, which most investors buy, have risen more than 70 per cent over the past five years.

There have been signs that the market has slowed this year. Statistics show that there is a clear slowdown in the property market nationally. Transactions and prices are down, while supply and the period taken to sell properties have risen.

Paris has resisted the downturn better than most other regions. Prices were still rising earlier this year even while, according to figures from the Chambre des Notaires, the number of sales for May to July in Paris fell by 17 per cent compared with the same period a year earlier. However, Susie Hollands, founder of property search agency Bonapart Consulting, said that the latest sales figures from her company showed that prices had begun falling in Paris, and there was a decline of 0.2 per cent over the past three months.

Miranda Bothe, managing director of Paris Property Finders, said: 'What does seem true at the moment is that there is a bit of a waiting game happening on both the selling and buying side. There is less on the market now than would normally be the case [this time of year] and properties are staying on the market longer so there is more room for negotiation in the asking price.'

Most experts believe that the market will not collapse. Mr Vines said that prices in Paris would probably fall by 10 to 15 per cent, which is less than the 15 to 20 per cent forecast nationally.