Forget London House Prices. Take a Look at Paris

Before a sex tape dashed Benjamin Griveaux’s hopes of becoming the next mayor of Paris, the preferred candidate of French President Emmanuel Macron could be found promoting his answer to the capital city’s increasingly dysfunctional housing market. What the average priced-out Parisian needed, according to Griveaux, was a handout of 100,000 euros ($108,380) to use as down-payment in return for a stake in any upside from the property’s resale down the line. “Paris is choking its middle class,” he warned, a year after anti-Macron protesters broke into his office building.

Maybe it’s a good thing such a policy won’t get tested. The U.K.’s own “Help To Buy” plan shows how boosting demand may only add fuel to the fire. Between 2010 and 2018, the price of the average London home rocketed 72%, according to government data, while homelessness rose 209%.

But it also shows just how desperate some politicians are when it comes to dealing with the effects of a property boom that bears some of the hallmarks of an excessive bubble.

UBS recently ranked Paris the most unaffordable major city in the world, bar Hong Kong, estimating a skilled worker needed 15 years’ worth of wages to afford a 60-square-meter (646-square-foot) centrally-located flat. To be clear, one square foot of prime Parisian property is cheaper in U.S. dollar terms than San Francisco, London or New York. But the gap is narrowing. Even in the face of protests and strikes, the French capital’s prime residential market rose 6.4% last year and may rise 5.9% this year, outperforming other big global cities, according to Savills. Paris property prices have more than doubled in 15 years, and the average price per square meter is up 19% since 2016, according to Century 21.