What’s up and down with France’s Property Market?

What’s up and down with France’s Property Market?

Since the Olympics is now in France, I looked at France’s property market and I realised that their property market is not doing well currently if we look at the price movement. I meant, not good for the owners. Falling prices should be good for potential buyers. Prices have been falling after a high point in 2011 (both in slower increase and later started to fall below 0 after Q1 2021.

If we look at the chart below, COVID could have played one part as the prices started to slow down its increase after Covid arrived in 2020 and this has turned into a fall in property prices starting in Q1 2021 and this has continued until currently.

What’s the typical price per sq ft? (they use per sq m)

Conversion from sq m to sq ft is as follows:

In sq m, it’s roughly as high as €9,490 and as low as €3,200 as per above. Converted into sq ft, it’s around €881 (RM4,457) per sq ft at the highest or €297 (RM1,502) at the lowest. Euro to RM is 1: 5.06. Thus, the lowest would be around the higher end side for Kuala Lumpur. The highest end is definitely much more expensive than Kuala Lumpur. We do not need to compare this to Selangor or even other states in Malaysia.

Is it affordable then for the French?

“The average salary in Ile-de-France (Paris region) is €3,087.” This translates to €37,044 (RM187,442) per year.

“A person working in Engineering in France typically earns around €41,800 per year. Salaries range from €13,300 (RM67,298) (lowest average) to €88,500 (RM447,810)(highest average, actual maximum salary is higher).”

Info Soucre: Source: joinhorizons.com

The typical size for a 1 room apartment is as follows: “1-bedroom: 30-70 sq m” This is around 322 sq ft to 753 sq ft. Source: parisrental.com

Some listings from: franch-property.com

Some listings from: franch-property.com

Someone who’s in Engineering and earning a typical salary would have a salary to home price ratio of 8 – 10 times. If the person is not in Engineering, then salary is even lower. Briefly, this is not affordable to a typical engineer in France.

Just for context, a typical engineer in Malaysia would probably earn around RM60,000 per year. This person could choose to buy a PR1MA property and that’s 5 times his / her pay or he / she could choose from the many condos which are abundant in the market today. A typical 1,00 sq ft condo would probably be RM500,000 to RM600,000. This is 3 times larger than the unit which a French could buy for a similar price in Paris.

What’s expected to happen next?

According to Knight Frank’s latest Residential Property Market Report, price erosion is projected to persist in 2024, possibly surpassing 2023 levels, with variations depending on property type, location, and quality.

“The French economy, the second largest in the eurozone, experienced a very modest expansion of 0.9% in 2023. Economic forecasts from both the International Monetary Fund (IMF) and the European Commission expect the economic activity to remain subdued in 2024, with an anticipated annual growth rate of 0.7%, before gradually accelerating in 2025″ Source: Source: https://www.globalpropertyguide.com/europe/france/price-history

Typical interest rate?

Yes, not that big difference from Malaysia. Our mortgage rate is slightly higher at typical 4.3 percent today.

Now you and I have learnt a little more about the France’s property market

I do not think there’s any Malaysians thinking of buying a property in Paris but it’s okay. General knowledge is always good to have. Now that you know that the home price is considered expensive in Paris, you would also know that you need to expect to pay a higher rate for accommodation when you travel to Paris the City of Love in the near future. Happy travelling and perhaps even thinking of a property in Paris, France? Till then, Au-Revoir!

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