Rising mortgage rates hit Paris’s buzzing canalside quarter

When chef Maxime Bouttier was considering a location for his first Paris restaurant, which opened in April, the Canal Saint-Martin offered an enticing mix of relatively affordable rents and excellent travel connections.

“It is much less expensive than the 6th or the 8th arrondissement, where many of my diners will travel from,” he says. “But, at the same time, you feel right in the middle of things.”

What drew Bouttier has proved popular for those seeking a good-value home in a central location, where commercial rents are mirrored by lower home prices. Waterside properties abutting the 4.6km canal, which runs through the 10th and 11th arrondissements and gives the area its name, still cost significantly less than those nearby on the Seine.

Average list prices in the 10th and 11th arrondissements are €9,806 and €10,128 per sq m respectively, according to French property website Meilleurs Agents. To the south, abutting the river in the 4th, the average is €13,813; cross the Seine into the 6th and this increases to €15,540.

Cheaper prices and a central location have made the area popular with younger buyers, including those purchasing for the first time or with smaller budgets, for years. But, with mortgages typically making up a larger share of their total home price, this group has been hard hit by France’s rising mortgage rates.

In February 2022, when Giorgia Rowe, 27, started searching the area for a home to buy, her mortgage broker said she would be able to get a mortgage with an interest rate of 1.2 per cent.

By June, she had found a one-bedroom apartment in the Canal Saint-Martin for €350,000. But, before she could agree the purchase and secure the mortgage, she needed to sell her studio flat. With mortgage rates increasing, it was a race against time: by August, when she was ready to buy, her rate was 2 per cent.

“Another month of mortgage rises and I wouldn’t have been able to afford the home,” she says.

For many, mortgage rate rises have meant they can no longer afford a purchase. Since the European Central Bank started raising interest rates in July 2022, home sales have fallen up to 35 per cent, according to Yves Romestan, chief executive of YRSA Progedim, an estate agency that covers Paris. Nationwide, the average rate for a 20-year fixed mortgage is now 4.02 per cent, according to Crédit Agricole, the French bank.

“The current situation excludes many first-time buyers from the market and many smaller, cheaper properties can now only be targeted by investors,” says Thomas Lefebvre, head of research at Meilleurs Agents in Paris.

Its growing popularity among younger residents has given the Canal Saint-Martin area a distinctive bustle, and the area is dense with a range of spots to eat, drink and shop.

It’s a walkable neighbourhood and there’s no need necessarily to go beyond it for what you need, you kind of have it all here

A 10-minute walk from Rue de la Folie Méricourt, where Géosmine, Bouttier’s restaurant, is located, independent shops, bars, restaurants and delicatessens cluster along a section of the popular Rue de Lancry, between the pedestrian canal bridge of Pont Tournant de la Grange-aux-Belles and the Metro station on Place Jacques Bonsergent.

These include bistro and natural wine specialist Le Verre Volé (The Stolen Glass), Viande & Chef, a butcher that opened in 2015, and specialist chocolatier Denver Williams, whose website claims the business is “as Parisian as the Canal Saint-Martin” and exhorts visitors to watch staff shape their wares in the chocolate workshop.

Around the corner is the celebrated covered food market on Rue du Château d’Eau, established in the 19th century. For Bouttier, who frequently makes the 15-minute walk from the restaurant to source produce, it was a draw and adds to the area’s self-contained feel. “It’s a walkable neighbourhood and there’s no need necessarily to go beyond it for what you need, you kind of have it all here,” he says.

Soon after Julie Ciraolo, 33, bought a ground-floor flat nearby in 2018, for €490,000, her section of the canal was pedestrianised and she noticed foot traffic in the neighbourhood — and the number of new local businesses — increase. These days, she says, she has lost count of the number of new bars and restaurants that have opened locally.

Aside from the prices and the waterside location, another draw for her was the fact she was within walking distance of two green spaces. To the north is the nearly 25ha Parc des Buttes-Chaumont with its distinctive Temple de la Sybille, a Roman-style monument based on the ancient Vesta temple in Tivoli. The smaller Jardin Villemin to her south includes sports facilities, a bandstand and a playground. “In Paris, being this close to two green spaces is a real luxury,” she says.

Ciraolo enjoys the noise of conversation from the bar opposite her and she dismisses local grumbling that the neighbourhood has become too fashionable among the bobo class, a popular French term for affluent professionals with pretensions to bohemian values but who lead bourgeois lives.

“They shouldn’t forget the 10th is an active, thriving district. Some people tend think they are in 16th and expect tranquillity: let them move,” she says, referring to the upmarket westerly district accommodating many of the city’s embassies and museums.

Rowe, who has visited the area since she moved to Paris from London in 2017, has noticed the change, too. “Today, sometimes as soon as I leave my building I’m hit by the crowds.”

But despite the tourists — and the white-knuckle ride of securing her mortgage — there is nowhere she would rather move, she says.

Originally from the UK, she travels back to London seven or eight times a year via the Eurostar, which departs from Gare du Nord, a 15-minute walk from her home. With the area’s good connections — Gare du Nord, Gare de L’Est and République lie on several Metro lines — it also appeals to her friends.

When we speak in May, she has recently hosted a midweek evening picnic for eight, gathering on the grass next to the canal in front of her new apartment. The group has assembled from across the city — some arriving by bike or moped, others via Metro — for an archetypal French spread: two bottles of rosé and some Kronenbourg 1664, filling baguettes with cheese and saucisson purchased from a local shop.

“It sounds like a cliché but it’s a cliché for a reason, this is one of the best picnic spots in Paris,” she says.

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