bonapartconsultingparis

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. “

Paris Prices in 2002 by arrondissement

If this doesn't make you green with envy, I don't know what will. Here's the Paris average by m² (our base method of evaluating property values) back in 2002 when the property boom was just taking off.

French Real Estate Glossary

ANCIEN: older building
APPARTEMENT: apartment
ASCENSEUR: elevator/lift
ASSEMBLÉE DES COPROPRIÉTAIRES: general meeting of owners
BALCON: balcony
BUANDERIE: laundry room
BONNE DISTRIBUTION: well laid-out floor plan
BOX: parking
BUREAU: study/office
CARACTÈRE: character, something unusual...
CARRELAGE: ceramic tile
CAVE: cellar
CC - CHARGES COMPRISES: charges included, usually refers to the agency's fee
CHEMINÉE: fireplace
CONFORT: comfortable
COPROPRIÉTÉ: co-ownership group
CHAMBRE: bedroom
CHAUFFAGE: heating
CONGÉLATEUR: freezer
COULOIR: hallway
CUISINE: kitchen
CUISINE AMÉRICAINE: open kitchen
DIGICODE: entry code system to building
DOUBLE EXPOSITION: double exposure
DOUBLE SÉJOUR: large living room
MOULURES: mouldings on the ceilings of classic French apartments
OCCUPÉ: occupied, someone is living there, sold with a tenant
PARKING: parking
PARQUET: hardwood floors
PARTICULIER: owner listing
PARTIES COMMUNES: common areas
PIÈCE: room (not kitchen or bath)
PLACARDS: closets
PDT, PIERRE DE TAILLE: cut stone building
POUTRES: wood beams
RANGEMENTS: storage, cabinets, shelving
RAVALÉ: restored, cleaned
RDC, REZ-DE-CHAUSSÉE: ground floor, street level
RÉAMÉNAGER: to be renovated
RÉCENT: recently constructed building
REFAIT NEUF: newly remodeled
RÉFRIGÉRATEUR: refrigerator
SALLE D'EAU: bathroom with shower and sink
DOUBLE VITRAGE: double-paned windows
DOUCHE: shower
DRESSING: walk-in closet
ENSOLEILLÉ: sunny, lots of light
ENVIRON: approximately
ÉQUIPÉE: fully equipped
ÉTAGE: floor
FOUR: oven
GARAGE: garage
GARDIEN: concierge/caretaker
HAUSMANNIAN: building from Haussmann era - 19th/20th century
HONORAIRES: fees
HORS CHARGES: charges not included
HOTTE: ventilation hood
HSP, HAUTEUR SOUS PLAFOND: high ceilings
IMMEUBLE: building
INDEPENDENT: separate
INTERPHONE: intercom system
LAVE-LINGE: clothes washer
LAVE-SÉCHAGE: clothes dryer
LAVE-VAISSELLE: dishwasher
LOCATION: rental
MEUBLÉ: furnished
MOQUETTE: carpet
SDB, SALLE DE BAINS: bathroom
SERVICE: maid's room
SOUS-SOL: below ground
SOLEIL: sunny
STANDING: luxurious, grand standing building
SUR COUR: overlooking courtyard
SUR JARDIN: overlooking garden
SYNDICAT DES CORPROPRIÉTAIRES: collective body of owners of common property
TABLE DE CUISSON: range
TAPIS: area rug
TAXE FONCIÈRE: annual real estate tax
TAXE D'HABITATION: annual occupancy tax
TERRASSE: terrace
TOMETTE: red clay tile flooring
TRAVAUX À PRÉVOIR: work to be done
VIDE: empty
VITRÉE BAIE: bay window
WC: toilet