bonapartconsultingparis

Who is buying in Paris?

Rest assured we are not looking at a price drop in the Capital. Transactions started to get back to normal after the Christmas break by about mid-March despite a "phoney war" period as buyers were on tenter-hooks waiting to see if prices would begin to drop.

Not a chance! Paris is still a reasonable price for a world class capital on a global level and we will not see property prices tumbling here, even after the seven year hike which some predicted would pan out. 

So who's been buying in Paris over the last 6 months?  The following is translated from an article in French by Richard Bellanger.

Italians:  - Still the biggest group of foreign buyers.  Looking for small spaces with great views.  At one time very active in the Marais and Montorgueil but now colonising the 1er arrondissiment (Louvre-Marché St Honoré) Paris' "Little Italy".
Russians : - Despite grave economic problems there are plenty of Russian buyers (albeit a little less jet-set) searchingin  the 16ème and the Triangle d'Or area (Champs Elysées-Montaigne).  Looking for properties of 150m² with a preferenece for apartments witha beautiful facade, entrance and zero renovation needs.
Middle Eastern : - There has been a return of the buyer from Dubai the UAE and Qatar.  With a notable preference for the 8ème, 16ème and Neuilly, 300m² + with one bathroom per bedroom. Sought after properties are those which are private and secure.
New on the scene :  From Asia; buyers from India, Laos and Korea, from the eastern European countries; Bulgarians, Yugoslavians and Ukrainiens and a resurgence of buyers from Switzerland, Belgium and Luxembourg.

How to evaluate a property

We found a wonderful article online recently and thought it would interest our readers.  When purchasing Parisian property, buyers are frequently misled by the average price per m2 which only gives a general idea but does not necessarily reflect the true value of a property, which can depend on several factors : address, level in the building, quality of common areas, services, etc. The table below gives an indication of how to evaluate, even though we all know, each property is a case apart. (Source PAP newsletter)

Floor Level	Compared to average price/m2
Ground floor overlooking street	- 15 à - 25 %
1st floor	- 7 %
1st floor with café or trader open late below	- 20 %
3rd floor to 6th floor with lift	+ 2,5 % per floor
Location	Compared to average price/m2
Overlooking dim courtyard	- 10 %
Building less than 10 metres away	- 10 %
Terrace or garden	+ 5 à + 15 %
Double orientation East/West	+ 3 à + 5 %
Beautiful view (Parisian monument, open views)	+ 5 à + 20 %
High level of disturbance from traffic	- 15 à - 20 %
Technical qualities	Compared to average price/m2
Property entirely renovated (electricity, plumbing, insulation, etc.).	+ 15 à + 20 %
Property requiring light redecoration (painting, floors, decoration, style)	- 5 à - 10 %
Property requring renovation (depending on the extent on the renovation)	- 10 à - 30 %

Luxury Residential Area Properties A Market Study

Bonapart presents its market study on current developments in luxury residential area real estate. The study covered sales of apartments and homes in the exclusive residential areas of Paris (1e, 2e, 3e, 4e, 5e, 6e, 7e, 8e, 16e and 17e south) and its western suburbs (Neuilly, Boulogne, St Cloud).

To receive details of this report, contact Director Susie Hollands.

98.5 % of the 2 to 4 M€ transactions, and the almost all of > 4 M€ transactions in Paris and in Hauts-de-Seine were carried out in these residential areas.

There has been no drop in the number of transactions – or in prices – in the afore-mentioned luxury residential areas, contrary to the trend observed in the provinces and the greater Paris metropolitan region.

Luxury and prestige - what Paris is best at!

People are always asking me if the prices are dropping or going to drop at the moment. Especially those sitting on their hands waiting for their chosen currency to improve or the usual French lament that there is going to be a big crash in the property market. Don't bet on it and if you are after something special (of course all of our clients are) you should know that we have not seen any drop in prices for exceptional products in good areas. They are always quick to sell and the prices are still going up. This also applies to smaller products with charm so hold out for something with the wow factor.

The international buyer is always active in Paris; Russians, Americans and those from the Middle East - and prices in the heart of Paris continue to rise between 5 and 10%. Prices for run-of-the-mill (or just plain ugly of which there are legion in Paris contrary to popular belief) properties have stagnated slightly in the second half of 2007 but good products in les beaux quartiers (1, 2, 3, 4, 5, 6, 7, 8, 16, South 17, Neuilly, Boulogne and Saint-Cloud) have continued to perform well.

New Eurostar service boosts commuter interest in French property, says report

I think the Eurostar factor will fuel British spending and those spending time in Paris; on holiday, investing in property and even full time living here - it's feasible to commute daily; anyone who has used public transport in the UK will see that the new super rapid Eurostar is a damn site more fun than schlepping from Banbury to London on the Great Eastern Railway. Traditionally Brits have headed for the french countryside (seeking pastoral idylls harking back to Britain in the 1950's I'm told) but have been, until now, less likely to settle in Paris than their American cousins.

From French Entrée - The improved Eurostar service, launching from its new home at St Pancras station in London in the middle of November, has already fuelled increased interest in buying properties in France, according to currency specialists HiFX. It says the promise of fast links back to the UK is encouraging workers to consider properties in France as a permanent base rather than just as a second or holiday home. In 2006 a study predicted that 1.5 million Britons will commute internationally by 2020.

Read on....

Join the Paris express

From the TimesOnline (UK) - A SURGE in the popularity of second homes is set to follow the Chancellor’s tax concessions unveiled this week. Anyone selling such a property after nine years will benefit from the new low rate of capital gains tax on the profits – only 18 per cent. According to Liam Bailey, Knight Frank’s head of residential research, “this could have the effect of raising investment volumes – and hence underpin prices in investment and second-home locations”. Paris, which is already receiving a boost from the high-speed Eurostar train link from St Pancras starting next month, is set to be one of those locations. House prices in the French capital rose by 9.9 per cent last year.

They rightly address in the article the best method of renting for increased returns and security as a landlord that you should concentrate on furnished rental property of a one year lease - see our own article.

Paris : toujours plus cher

Despite the fact that elsewhere in France property prices are plateau-ing and the French media howls about "Le Krach" (the crash), for reason's mentioned earlier this week, Parisian property prices are still going up.

The median price per m² is 7 000 € and easily 10 000 € + in the sought-after quartiers, such as the 4th, 6th and 7th.

To take a look at the prices per arrondissement compiled by property website PAP (where owners list their property for sale direct). Figures are based on the sales price reported by owners advertising on their site after they withdraw their adverts when the properties sell.

Manhattan v Paris France

We recently had a client who was purchasing a property we'd hunted down for more than one year and finally got exactly what he wanted, a top floor apartment (with elevator, biensûr!) in a classic Haussmanian building and view across THE square he'd fallen in love with when I introduced him to the neighborhood.

This is the one we'd been patiently waiting for and constantly checking and re-checking when it was going to be put on the market, (beating a purchaser who lived inside the building and had been hounding the owner for years!).

In the price evaluation we did a comparison for our client who has a similar sized property in New York City and the results make interesting reading.

"My personal point of reference, price-wise, is my NYC apt in West Chelsea's London Terrace, which is easily the equivalent of Sq Trousseau (it's a doorman building with celebrities and an Olympic indoor pool. And it's in the HOT art-gallery district. The size is about the same (510 sq ft)... but there's no view. The current price is around $550,000 (400,000E)."

Waves in the UK/US vis a vis Paris

A client coming to purchase property wrote to me yesterday; "Susie - has there been anything in the French press about the waves in the British and U.S. property markets recently and whether it may or may not affect the French market? What are your views?"

Voilà mon reponse.......
We haven’t felt ructions in Paris and don’t expect too. Frankly the city is in just such another league that it is not affected by theses ups and down. Paris is right up there as a great bargain in comparison with other world capitals such as New York City (more on this soon) and London. Prime Central London, where 120m2 super-luxury apartments can cost £1,170,000 or £9,750 per m² (in Euro: €1,742,656, or €14,522 per m2). Apartments of 120m2 in other luxury areas of Central London are likely to cost £580,000 or £4,833 per m2 (€863,880 or €7,199m²). A 120m2 apartment in Paris has an average purchase price of €800,000 (€6,667 per m2). We WILL catch up and it’s still a great time to get your Parisian pad.

Parisian property is a great investment and here you can still afford to buy into the historic centre, which is heavily protected - there is almost no new residential development due to a lack of available land and tight planning restrictions. Paris is the number 1 most visited city in the world and a strong business and study centre for Europe. While domestic demand may increase over the next a general rise in property prices could make buying in tourist areas dearer as time goes on.

Discussing the Dollar - the time is now!

Flavour of the month is the drop in the dollar. I'm constantly emailed by clients and those poised to invest here who are teetering on the edge but waiting for the dollar to improve. Sadly for them, as Moloko said, the time is now. En mon avis and plenty of finance professionals, it looks like it won't and by the time they make the plunge, the Paris property prices will be on the move.

I read on Bonjour Paris this week that New Orleans, native Timothy Ramier, a specialist in International Tax, Trust & Estate Law says, ‘People are waiting for the Paris real estate market to take a dive, but it appears to be more rumor than reality. Compared to London, New York, Tokyo, Moscow and some other major cities, Paris real estate is a bargain.”

This I'd have to agree with and since we have our very own Maggie Thatcher (in drag of course) it's highly unlikely that his free market reforms are going to have anything other then a positive effect on property prices.

Ramier agrees with me: “Sarkozy promised the French a change and that’s what they’re going to get. People are upbeat that the new President is going to give a major boost to the economy. “