November 26, 2010
So we’ve all heard that Europe’s not doing so great. But, it seems that Paris property prices have taken off to hit all-time highs.
But, while I’m certainly no expert on the European economy, it doesn’t seem like France’s prosperity is fueled by an underlying strength in their industry. The increase in prices seems to be caused by very low interest rates and demand from foreign investors.
According to the Financial Post:
At 7,030 euros per square metre in the three months to the end of September, the average price of a flat in Paris was 13.8% higher than in the same period a year earlier and 5.1% dearer than in the previous quarter, up to end-June.
And analysts predict that Paris hasn’t hit the ceiling yet. Projections indicate that prices will rise 15% in total in 2010.
Oh la la!
And while it might be sort of backwards to think this way it looks like economic uncertainty could actually be helping the Parisian housing market. You know how gold prices go up when times are bad? Well, Parisian homes might have the same thing going on. They’re a “safe haven” because, when it comes down to it, people are always going to want to live in Paris.