Europe's major property destinations. Part 2: Paris

Paris, the capital of France, is the heart of French culture and world famous for great art and stunning architecture. The beauty of the city has made Paris one of the greatest tourist attractions on the globe. 

by Lukas Schwind Published on:

Paris

Paris, with approximately 2.1 million residents, is one of the most populous cities in the European Union. The French capital features many aspects and is a rich architectural heritage with countless museums and monuments, but at the same time a trendsetting metropolis. Many people from all over the world visit Paris every year. And many, if they can afford it, stay. This makes housing and real estate in Paris inevitably a top priority. Historically, Paris has tried to maintain the urban structure once created by architect Haussmann, which in turn has had a restraining effect on housing supply.

As a result, prices are at record levels. Nevertheless, low interest rates have made it possible for a long time for not only Parisians to buy real estate and have kept demand at a constantly high level. In addition, the French are a nation with a tradition of real estate ownership. Around 58 percent are homeowners. A second home or a small house in the countryside is not necessarily the rule among the upper classes, but it is not the exception either.  These factors have helped demand for housing to rise over the years. And with that demand, prices rose to a level that today makes a real estate purchase unaffordable for large segments of the population.With comparatively low income structures, many native Parisians are forced to look for houses and apartments outside the city or in other cities.

According to the real estate network Century 21, last year over 79.4% of buyers were executives. The average price per square meter of an apartment in Paris is nearly €10,600, while for houses the average price per square meter is around €11,200.

Strengthening of city centers

In order to confront the strong centralization to Paris and to promote the centers of smaller cities, the French government has invested around five billion euros in the "Action Urban Core" program over the past few years. This is reflected in population trends; since 2012, Paris is losing about 10,000 residents a year to more affordable residential cities. Unexpectedly for many, in 2021 housing prices in Paris fell for the first time within years, although only marginally by about 1.5 percent, while prices in medium-sized cities increased by about 6 percent. Experts do not speak of a tendency.   

Certain mandatory ancillary purchase costs must be calculated when buying real estate in Paris (and France). These include home insurance, which is mandatory in France. Municipal costs depend on the area and size of the property. However, due to the complexity of the French tax code, you should seek comprehensive advice. 

Universities

Studying in France can be accomplished on a relatively small budget, although this depends greatly on the individual situation and study discipline. In general, there have been no tuition fees in France since 2011; only the enrollment fee is charged once a year. This applies to all state and German universities in France. Students also benefit from better conditions for rent. However, the enrollment fee remains payable. Tuition fees are only charged at the Grandes Ecoles. The costs can be up to about 7,000EUR in private universities. 

Another aspect that students on a budget must consider is the cost of living, which is relatively high in a city as prestigious as Paris. According to Mercer Consulting, Paris is the 47th highest in cost of living in the world (as of 2019). This puts Paris behind London, but ahead of Brussels, Rome, Amsterdam or any German city.Berlin is only 81st in the ranking. Statistics from the Numbeo database also show that food is about 20% more expensive in Paris than in the rest of France, and rents are well double those in most other French cities. 

Despite these challenges, France is one of the most popular study destinations in the world.  About 6% of international students choose to study in France, with most of them staying in Paris. Languages and humanities top the list of best-attended courses, followed by sports and economics.

Cost of living Europe

Stadt Rang 2018 Rang 2019
Zürich 3 5
Bern 10 12
Genf 11 13
Kopenhagen 14 20
London 19 23
Dublin 32 43
Mailand 33 45
Paris 34 47
Wien 39 51

Germany

Stadt Rang 2018 Rang 2019
Munich 57 67
Frankfurt 68 74
Berlin 71 81
Düsseldorf 82 92
Hamburg 88 100
Stuttgart 108 126
Nuremberg 145 151
Leipzig 150 156

Economy

Countless monuments, famous landmarks and delicious food are only a few but relevant aspects of the French capital. France is the most visited country in the world. Tourism takes a significant role in the GDP with almost 8 percent. Two million direct and indirect employees ensure that around 35 million tourists get to enjoy Paris every year. By comparison, the figure for Berlin was just under 14 million visitors in the pre-Corona year 2019.

Meanwhile, in Paris, the Corona virus also caused major economic damage to the tourism sector. Currently, the sector is recovering, but has not yet regained its former strength. Besides tourism the manufacturing, energy, agriculture and fashion sectors generate around one-third of the gross domestic product in the Paris metropolitan area. In addition to millions of tourists, the metropolitan region's agriculture also supplies food for more than 12 million residents in the greater Paris area. Fortunately, Paris is surrounded by a very rich and fertile countryside. 

Fashion, luxury and Paris! The home of haute couture, and fashion houses like Chanel and Dior. The fashion shows remain sold out on a regular basis for years. Textile and jewelry industry repeatedly reach top sale figures.

As far as transportation is concerned, France is in an excellent position. High-speed trains connect almost all major cities and are very popular. France ranks among the top ten countries with the best rail networks in the world. The road and highway network is well developed, and the major airports Charles de Gaulle and Orly offer excellent transportation options, especially for business. For some time now, Paris itself has been consistently focusing on traffic reduction. Individual traffic is increasingly pushed out of the city centers.

Berlin and Paris?

These two cities have developed highly sophisticated and efficient public transport systems. Both rely on a mix of subways, metros, streetcars, buses, and cabs. 
They both attract many startups and have developed ecosystems to support them. However, investors invest more venture capital in Berlin than in any other city in all of Europe.  
Berlin is surprisingly inexpensive in terms of cost of living.
The real estate market, unlike Paris, is expected to grow for decades to come, despite external effects of the crisis.


Read soon in the metropolis comparison: Madrid

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