Here the facts:or even here :website about real estate in parisActual price 7753e/m², in 1980 ten times less.I expect a krach in a few years.

1: paris area is very limited2: there is almost no new construction in paris "intr-muros"3: the population is growing4: paris is paris; ie: a city where all the richest guys around the world want a beautiful appartment with a lovely sightdo you still think its a bubble ?

In five years, the prices increased by 31%. I don't think that the demography increased by this amount Your factor 4 is one of the main cause in my view (investment by foreign capitals).

if you think that about Paris, what's your opinion of London real estate?QuoteOriginally posted by: frenchXHere the facts:or even here :website about real estate in parisActual price 7753e/m², in 1980 ten times less.I expect a krach in a few years.

i would say that housing in many big cities around the world have got out of reaching for many people

My 2 cents on this non quant discussion...I spent 6 months in Paris last year and thought it would be easy for me to rent a flat or even buy one... After a few months I realised it's very difficult and expensive to get a decent flat and if you want to buy there's a lot of competition.In London I reckon the drivers of real estate are: - foreign money (middle east, russia and pretty much the whole world)- City money- "buy to refurbish and then sell" culture, "buy to let" culture... Every one and their dog in the UK think real estate is THE way to make money.Prices in London are just RIDICULOUS!In Paris it's a totally different situation. Even though there may be some foreign investors, I don't think it's anything like in London. Also, keep in mind that speaking French is compulsory if you want to live in Paris... London is a much easier target for foreign investors.The buy to let culture is non-existent, tenancy agreements are 3Y long minimum and it's very difficult to evict tenants even if they don't pay.People don't make that much money in Paris and nevertheless real estate prices just keep on going up which is hard to believe... My understanding is that most people who own flats (especially in good neighbourhoods) got them from their parents. Most of those people are NOT interested in selling. In Paris the problem is liquidity!n There's more demand than supply, that's it, so people put higher bids. I don't think it's a bubble.If I were wrong and it was actually a bubble, I am not too sure what would make it burst... In France when someone loses their job, they have massive "social cushions", I mean you can still receive 80% of your last salary for at least 2Y, so no pressure to sell the house... And French people who buy flats usualy do it in a sensible way. I mean they have put down a decent deposit (no piggy backs, interest only or subprime mortgages) and they have a fixed rate mortgage (20Y-30Y), so there are no surprises on the monthly payments if the central bank decides to double the rates.Mate, I think the bubble is in London!

QuoteMate, I think the bubble is in London! The bubble is everywhere where the net rental yield is much higher than a treasury year. and the property prices have persistently grown at rates much higher than the GDP growth rate over the last years.

Interesting! I'm inclined to agree with GoldDigga -- it's simple (limited) supply & (wealthy) demand. The extremely modest dip in 2008-2009 suggest no panic surge in sellers. Unless Paris sudden permits an explosion of high-rise flat construction along the Seine, the price in Paris will be set by the wealthiest of buyers who crave a Paris address and compete for the limited supply.What could bubble & crash is real estate in the far outlying suburbs (probably outside the A86 ring road). This is where the less-wealthy live and commute into the city. Ultra-high prices in the city and limited construction in the city force speculative land development into the suburbs. But if the economy falters for any reason, it's the workers in the outlying areas that face greater selling pressure and less demand.