Paris steals London's crown as Europe's top property market

Jake Cordell
Follow Jake
Eiffel Tower at Night
Paris has taken the top spot as Europe's most promising property market (Source: Getty)

London has lost its spot as Europe's top real estate market in the wake of the EU referendum.

A leading index of Europe's most promising property hotspots found Paris has knocked the capital into second place for the first time in four years with the London market looking set for a bumpy ride as the UK buckles down for a dose of Brexit uncertainty.

US-based investment firm La Salle also said regional cities such as Manchester and Birmingham were likely to be hit harder than the capital as corporate hiring dries up due to "economic uncertainty created by a looming Brexit".

Read more: The London house price decline continues

French and German cities climbed higher in the rankings as their economies outperformed and labour market reforms in France helped push unemployment down, boosting consumer demand and stoking the property market.

Europe's top 10 property markets

Rank City Change from 2015
1 Paris + 1
2 London - 1
3 Stockholm + 1
4 Munich + 3
5 Luxembourg No change
6 Istanbul - 3
7 Dublin + 5
8 Madrid + 3
9 Stuttgart No change
10 Oslo - 4

However, political uncertainty weighed on the attractiveness of European cities as destinations for real estate investors and developers, La Salle found.

Mahdi Mokrane, head of research and strategy said: "Political decisions - rather than just the macro economy - have changed the outlook for many cities this year. Investors are questioning the economic future of markets where economic uncertainty prevails."

Read more: Is the UK economy now smaller than France's?

He added: "The uncertainty surrounding the UK's future trade relationship with the EU is dampening economic prospects in the UK, even though London and the rest of the south east remain strong in a European context thanks to a diverse economy and high human capital."

Dublin was the biggest mover in the top 10, on an index which looks at prospects for the local property market over the medium term, jumping five places to seventh.

It was buoyed by a bumper, if slightly dubious, explosion of growth in the Irish capital, with GDP rising by one-quarter over the course of 2015. The city could also be well-positioned to steal business from the UK or any other investors looking for an English-speaking gateway into the EU in the wake of Brexit uncertainty.

Related articles