House Prices Drop in Paris (2008)
Ten years ago, at the dawning of the new century, I made a major decision. I bought a flat. At the time it was a terrifying decision to make, with what seemed like huge sums of money involved. Buying a flat was just not a particularly French thing to do, and was a relatively complex and bureaucratic exercise. Couldn't I just continue to rent like the majority of people in France.
What a difference a decade makes. The moment I have picked out here was the month that prices in Paris finally stopped climbing and went into reverse, but some people believed it would never happen. From 1998 to 2008 prices in the city climbed 190%. I had been one of the winners.
House prices have always meant little to me. If I want to move, I'll always have to live somewhere, and if prices rise across the board, well I won't be better off anywhere else. I was on the ladder though, and admittedly it was a secure place to be. As the decade moved along, I could see who the victims of this inflation were. Colleagues who wanted to become first-time buyers found it impossible to purchase anything affordable in the city, and those renting saw prices increase too. Ten years ago, Paris had been an unimagined bargain. Now it had become a city of speculation like most of the rest of the world.
I'm happy to live in my purchase not because it has made me theoretical amounts of money but because it is a roof over my head. It is also nice to think that there is a little corner of Paris that belongs to me.
It is not clear what will happen to property prices in the city in the years ahead. As the decade draws to a close, house prices have begun to sneak back up again but they will surely drop back to more realistic levels soon. They will not collapse though like they have in the UK and US, because banks were more cautious here and because there is still a severe lack of housing in the city. The bubble finally stopped growing, but it will not burst. The next decade though will be one of very few bargains in the city.