Olympic Paris: what is happening in the real estate market of the capital of France?

What is happening in the largest French market – the Paris housing market? We analyzed the price dynamics in all 20 districts of the capital, studied how the Olympics affect supply and demand, and assessed the state of the long-term and short-term rental markets. We have also compiled a rating of districts on safety and noise levels – factors that are critically important for life in a megalopolis.

Paris residential real estate market before the start of the Summer Olympics

To begin with, let’s remember how the Olympic Games influenced the residential real estate market of other cities that had the opportunity to host such a large-scale global sports competition. Thus, after the Olympic Games in Tokyo in the summer of 2021, prices per square meter of residential real estate increased by an average of 22%; after the Olympic Games in London in 2012, prices for residential real estate in the city increased by 24%. The 2016 Olympic Games in Rio De Janeiro reversed the downward trend in real estate prices in the city, which has persisted for several years. 

Thus, the Olympic Games have a positive impact on the real estate market. Do not forget that the Olympics brings with it huge investments in the infrastructure of the places where it is held. It will be possible to assess the final impact of the Olympics on the Paris real estate market a few months after its end, but for now let’s look at what the situation in the Paris housing market was before the start of the Olympics.

According to the results of the 1st half of 2024, 56,962 residential properties were sold in the French capital, which is 0.8% more than in the 2nd half of 2023 and 6.5% less than in the 1st half of 2023. Such data is provided by the portal immobilier.lefigaro.fr .

Apartments predominate in the structure of sold housing — their share amounted to about 97% of all sold residential real estate. The remaining 3% percent were at home.

According to immobilier.lefigaro.fr, the average price of residential real estate in Paris has tended to decrease since 2020. At the peak of the cost – in July 2020 — the average price per square meter of housing in Paris was 11,665 EUR/sq.m, which is 12.2% more than in December 2023, when the price reached its minimum.

Since January 2024, a positive trend in the average cost of housing has been recorded in Paris. By the end of June 2024, the average price of residential real estate in Paris was set at 10,831 EUR/sq.m, which is 0.9% less than in May this year and 1% more than in June 2023. 

In June, the average price of residential real estate in the secondary market of Paris was 10.716 EUR/sq.m, which is 1.5% less than in the previous month and 0.3% more than a year ago. 

Before talking about the primary market, it is important to say that the primary market of Paris is small. There is no exact data on how many new homes are sold in Paris every month. According to the results of the 1st half of 2024, there is no data on the sale of new housing in 12 of the 20 districts of Paris.

In June 2024, the average price per square meter of new housing was 12.715 EUR/sq.m, which is 4% less than in May this year and 7.2% less than in June last year. Average prices for new housing are subject to more drastic changes, since due to the smaller market volume, individual new residential complexes can have a significant impact on the price.

Prices for residential real estate in the context of the districts of Paris

The capital of France is divided into 20 municipalities, which differ in the number of inhabitants, area, infrastructure and, of course, the cost of housing. If we consider the districts of Paris on the map, it catches the eye that 20 districts form a spiral, where 1-4 districts are the center of Paris, 5-12 districts completely surround the central districts along the perimeter, and 13-20 in turn surround the previously mentioned 5-12 districts.

The image is taken from eurolines.fr

Below is a table with data on the area and population of each of the 20 arrondissements of Paris.

* – according to the National Institute of Statistics and Economic Research of France

In the 2nd quarter of 2024, the most popular districts for the purchase of residential real estate were the 15th (Vaugirard), 16th (Passy), 18th (Montmartre) districts – these are some of the largest districts in Paris.

The most expensive districts to buy a home are the 6th (Luxembourg), 7th (Palais Bourbon) and 4th (Temple) districts.

6th District (Luxembourg) – the central district of the capital, which got its name from the Luxembourg Palace, built in 1631. Other attractions in the area include the Abbey of Saint-Germain-des-Pres and the Luxembourg Gardens. In this district, affordable housing is mainly represented by apartments on the secondary market. The average price of an apartment on the secondary market in the 6th arrondissement at the end of June this year was 15,236 EUR/sq.m.

The 7th arrondissement (Palais Bourbon) is the arrondissement where the most famous landmark not only of Paris, but of the whole of France is located – the Eiffel Tower; the arrondissement itself was named after the Bourbon Palace – the place where the National Assembly of France meets. The residential real estate market of the 7th arrondissement is represented by apartments on the secondary market; the average price per square meter at the end of June 2024 was 14,998 EUR/sq.m.

4th Arrondissement (Hotel de Ville) It is considered the historical center of Paris, named after the Hotel de Ville Town Hall, where the Paris municipal authorities have been located since the 14th century. Other landmarks of the 4th arrondissement include the Notre Dame de Paris Cathedral and the Georges Pompidou National Center for Art and Culture. The housing market of the 4th arrondissement is also represented by apartments on the secondary market; the average price per square meter in this arrondissement is 13.498 EUR/sq.m.

Below is a summary table with information by districts of Paris on the average price per square meter of an apartment on the secondary market by the end of June 2024.

The average price per square meter in the secondary market of Paris, EUR/sq.m.

If you are aiming to buy an apartment on the primary market then you should understand that it will almost always be an apartment in the districts that are located on the outskirts of Paris – these are districts from 11 to 20. Concurrently, these will be the districts with the largest area and the largest population.

The average price per square meter in the primary market of Paris, EUR/sq.m

If you are aiming to buy a house in the French capital, then it is best to turn your attention to the 20th (Menilmontane), 19th (Butte Chaumont), 16th (Passy), 13th (Tapestry) arrondissements of Paris. It was in these counties that houses were most often sold in the 2nd quarter of 2024. The most expensive district among them was the 16th (Passy) – here the average cost per square meter when buying a house was 15,093 EUR/sq.m. In other districts, the price per square meter for the purchase of a house was as follows: in the 20th district – 11,651 EUR/sq.m, in the 19th – 9095 EUR/sq.m, in the 13th – 9554 EUR/sq.m.

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Security rating of Paris districts

It would not be superfluous to analyze the districts of Paris from the point of view of security.

By the end of 2023, the French Ministry of the Interior has published data on how security is in the French capital. As a result, the districts of Paris were ranked from the safest to the least safe. The criteria were: assaults, thefts, burglaries, drug trafficking, intentional harm.

The safest districts were the 20th (Menilmontane), 14th (Observatory), 15th (Vaugirard), 17th (Batignolles-Monceau) districts – these are the districts of Paris with the least tourist traffic.

The central districts of Paris are the least safe districts of the French capital. The district with the lowest level of security in 2023 was the 2nd (Stock Exchange) district, immediately followed by the 8th (Champs-Elysees), 4th (Hotel de Ville) and 3rd (Temple) districts. Concurrently, these are the districts that tourists most often visit.

Ranking of Paris districts by noise level

Portal bfmtv.com He published a study in which the sound intensity was measured in 2,500 apartments offered for rent. Below is a map with the results.

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Long-term rental market

According to the portal immobilier.lefigaro.fr , the median rent in Paris in June 2024 was 39 EUR/sq.m when renting an apartment for long-term rent. Over the year, rents increased by 8.3% (in June 2023, the median rent in the city was 36 EUR/sq.m).

Below is a map and a table showing the amount of rent for renting an apartment for long-term rent by district (as of June 2024).

The amount of rent for long-term rental of an apartment, EUR/sq.m.

Short-term rental market

All the past Olympic Games have brought with them a surge in the short—term rental market – the same effect was expected from the Olympics in Paris. Many Parisians were going to rent out their apartments in the hope of earning money, as there were expectations that the cost of short-term rentals would increase 2-3 times. Now, a week after the start of the Olympic Games, we can say that the hopes of many Parisian landlords have not been fulfilled.

Portal hello.pricelabs.co In his article “The 2024 Paris Olympics: the impact on the short-term rental housing market”, he writes the following: the data received on July 25 show a decrease in the occupancy rate of short-term rental housing for the duration of the Olympics. The occupancy rate at this time is 42.9%, which is 12% less than in the first 2 weeks of July 2024 (then the occupancy rate was 55.1%). They also note that the occupancy rate during the Olympic Games is 9% lower than in the same period in 2023.

The decrease in occupancy of short-term rental housing can be explained by a significant increase in the number of rental offers, which increased from 74,386 offers for the same period in 2023 to 140,539 offers for the duration of the Games.

In turn, the number of nights booked in Paris increased by 56% compared to the same period in 2023: from 594,195 to 926,855 for the dates from July 28 to August 13, 2024. This growth highlights the increased demand for short-term rentals during the Olympic Games.

According to the data hello.pricelabs.co The average daily rate (ADR – average daily rate) for short-term rentals in Paris during the Olympics has increased. During the games, the ADR reached 342.15 EUR/day, which is 44% more than in the first 2 weeks of July (238.03 EUR/day). This definitely disappointed the Parisian landlords, because they, for the most part, expected an increase of 2-3 times.

Conclusion

The first 6 months of 2024 in the Paris residential real estate market look promising. The European Central Bank is expected to continue cutting key interest rates in the coming months of 2024. This is expected to lead to lower lending rates in the real estate market, which, in turn, will increase demand from potential buyers and stimulate activity in the market.

Paris is still an attractive place to invest in real estate, but it is worth understanding that such investments are precisely long–term investments. Currently, the Paris housing market is showing a positive trend in price changes, but they are still far from the level that was observed 2-3 years ago.

Author

Roman Tomashevich Analyst

I show the situation on the real estate market in graphs and figures.

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