The property market in Paris is slowing down, according to a new report from Lonres. The property company reported that after an active start in 2012, driven by the changes to Capital Gains Tax (CGT) in February, activity in the market has now slowed down, with prime property the only exception.

Many vendors rushed to sell before February’s CGT deadline, causing stock levels to increase and property prices dip by 3%. Now, the market has returned to its previous state, Lonres reveals, resulting in a two-tier market.

However, the French company report that Paris is becoming unattractive to international investors ‘because of the amount of red tape involved, no tax loopholes to exploit and tenants are legally very well protected.’ This is leaving the prime market to rely on wealthy French nationals.

Laurent Lakatos, founder of Lonres.com, stated: “We expect that the residential market in Paris will be fairly flat for the rest of the year and we may even see falls in the region of 1% to 5%.”