This recovery is being driven by domestic demand. Foreign buyers accounted for just 9% of the prime market in 2016 (sales above €1m), but we expect them to grow in importance. They already account for around half of buyers in the ultra-prime segment. The new government will bring clarity on legislation and a period of relative stability. This could encourage foreign buyers who have been waiting on the sidelines to act.
Paris is a top-tier world city that offers value on a global stage, and consumer confidence is building
Our combined Savills World City Ranking for connectedness, competitiveness, power and performance places Paris in third, after London and New York. But several years of more muted performance have left residential costs in the city significantly lower than its rivals.
However, with a new political regime, historically low interest rates and building consumer confidence, the residential market has now turned. Having bottomed out in 2014, prices increased by 5.8% in the year to May 2017. Prices in the 1st, 4th and 5th arrondissements have already exceeded their 2012 peak.
▼ A top-tier city, Paris is third on the Savills World City Ranking
■ Market momentum is building. Prices increased 5.8% in the year to May 2017
■ Foreign purchasers account for just 9% of the prime market, down from 14% in 2008
■ A Macron presidency is positive for the market. A pro-business stance could buoy economic growth
■ The Paris region benefits from a diverse economic base that generates 31% of France’s total GDP
■ The capital is a world city that offers value. Prime Paris prices are 32% below those of prime London