_Paris back in the spotlight as up-and-coming areas and new investment boost demand
How do you explain the uptick in demand for property in Paris?
From mid-2017 onwards a number of factors combined that helped build momentum. President Macron’s election and his pro business stance, along with a resurgent commercial property market helped put Paris back in the spotlight.
The initial surge came from domestic buyers who were subsequently joined by French expats, particularly those that had relocated in the wake of Hollande’s Wealth Tax in 2012, and later overseas buyers.
"Cheap finance as well as Paris’s relative value compared with other global cities persuaded many to increase their footprint within the French capital. "
How would you define the market in 2019?
Unlike many prime city markets around the world at the current time, Paris can lay claim to being a sellers’ market. Inventory levels – the number of homes being actively marketed – are at historic lows with well-priced prime apartments frequently finding a buyer within a week of launching.
How are prime prices performing?
Knight Frank’s unique Prime Paris Residential Index registered 5.3% growth in 2018 following 12% growth in 2017. We forecast prime price growth of 6% in 2019 putting Paris ahead of London, New York and Hong Kong.
Rising demand against a backdrop of tight supply is supporting prices. Paris, due to its history, lacks the large industrial regeneration opportunities that are seen in London. In addition, strict planning rules limit development and aside from La Défense, most areas are restricted to a height limit of just six storeys.
What motivates buyers to purchase in Paris?
The lifestyle on offer will always be the underlying motivation for most second home buyers in Paris. The City of Light is a cultural heavyweight offering 104 museums, 361 theatres, 5 opera houses and over 106 Michelin-starred restaurants.
A lead indicator of buyer trends is tourist demand and data from the Paris Visitor Bureau shows a 19% increase in hotel arrivals by US nationals in 2017. European markets are making a comeback, with German, Dutch and Spanish demand rising, whilst Chinese visitors (up 20%) climbed to fourth place.
What advice do you give buyers new to the Paris market?
The first challenge is to become familiar with the very different neighbourhoods and lifestyle Paris has to offer. The 4th, 6th, 7th and 8th arrondissements are the city’s prime districts with prices starting at €16,000 per sq m and reaching up to €30,000 per sq m.
The 16th offers green space and good schools and is often targeted by families. The 9th, 10th and southern parts of the 17th and 18th, referred to as “BoBo” (Bourgeois Bohemains) are rising in value as areas such as Canal Saint-Martin, South Pigalle and Batignolles appeal to a new generation of Francophiles.
"In the up-and-coming bracket, I’d reference Saint-Sauveur in the 2nd, Portes de Saint Denis in the 10th and Oberkampf in the 11th where values are now reaching up to €12,000 per sq m."
We also see different preferences amongst overseas buyers. Middle Eastern buyers target the Champs-Élysées neighbourhood, and the golden triangle which straddles the 8th and 16th where large apartments of 250 square metres offering lateral living are available. By comparison, US and UK buyers look to the Left Bank, the 6th and 7th arrondissements which offers the old-world glamour, a mix of upmarket eateries, galleries and art dealers.
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For more information please contact Kate Everett-Allen